The Northgate School Board can balance the coming year's budget, but it will not be able to raise taxes enough next year to fund the 2012-13 budget.

That is the rationale expressed by a majority of board members for why they plan to vote in favor of a 2011-12 property tax millage increase next week.

Finance committee chairman Daniel O'Keefe said at the board's work session on June 13 that of the $1.6 million cut from Northgate's budget for the coming year, about $1 million is a one-time savings due to retirements and staff furloughs.

O'Keefe said that this year's budget could be balanced with a transfer of about $146,000 from the reserve fund balance, which would leave the fund balance at about $350,000. Districts with Northgate's operating budget should have about $1.2 million in reserve, he said, in case of emergencies.

The board can expect to see annual cost increases of some $700,000 in the next several years, O'Keefe said, However, the board's ability to raise the millage rate has been curtailed by state law. Act 1 requires voter approval of tax increases over an annual index rate based on inflation, but the Pennsylvania Department of Education has allowed many districts to levy higher tax hikes by granting exceptions to the ballot referendum rule. Board president Susan Nolan said that there is a bill pending in the state legislature to close the exceptions loophole.

Although exceptions allowed Northgate to enact a large property tax increase last year, it's application for exceptions this year was denied in part.

O'Keefe said that one mill of property taxes equals about $360,000. If the board increases taxes this year by one mill, and does the same next year, it will have enough revenue to cover next year's deficit, he said.

He said that the board actually should increase taxes by 1.5 mills this year, but said that he understaood that was not a number either the board or the taxpayers could live with.

Board member Tim Makatura agreed that taxes needed to be raised more than one mill this year, "but I don't think we can."

"We want to maintain the quality of our school district as much as possible," Makatura said. "I think we really don't have a choice."

"It would be irresponsible to not do a tax increase," said board member Gary Palladin, who added that the district's next round of budget cuts would have to eliminate athletic and other student programs. The current budget does not include funding for full-day kindergarten and has reduced the budget for some extracurricular activities, such as the spring musical.

Board member Tony Barbarino said they also would support a one-mill increase, while Nolan said they she was "wavering" between a half-mill increase and a one-mill hike. Marita Bartholomew was absent, as was Shannon Smithey, but Nolan said she had talked to Smithey and been told Smithey might support a half-mill increase.

Board member David Natale was adamantly against the proposed tax increase, as was Shirl Reinhart.

"I will not do it," Natale said. "I will not vote for another tax increase for this district."

He pointed out that board members were proposing the increase without actually knowing what level of funding the state will contribute this year, as the battle over education spending continues in Harrisburg.

The district currently is negotiating a new contract with its teachers' union. Nolan and superintendent Dr. Reggie Bonfield were asked what level of salary increase was built into the 2011-12 proposed budget, but both said they did not know.

"We're rasing taxes based on the unknown," Natale said.

Natale said that the board needed to run the district's finances the same way someone would run a household's finances.

"You only spend as much money as you have," he said, stating that it was the board's responsibility to balance the budget, making the hard decisions to cut expenses when necessary.

O"Keefe said that the board could continue making cuts until no one wanted to attend Northgate schools because of their lack of programs and opportunities.

"The question becomes, what does the public want of their school district?" he said.

Reinhart maintained that there were still things in the budget that could be cut, including some secretarial positions. She said that every time she had suggested those cuts, she had been told the positions were important.

"Our children are more important," she said. "Our job should not be to keep raising the millage."

The board will vote on the final budget and millage rate at its regular meeting on Monday at 7:30 p.m.