Residents in the Hanover Public School District could see a 2.5 percent jump in property taxes in the fall if the school board approves the final budget as it stands.

The board was able to cut its annual budget by about $200,000 this year, from $28.8 million last year to a proposed $28.6 million in the 2014-15 school year.

With the proposed tax increase to the cap allowed by the state, property taxes would rise by 0.49 mills, or about $73.50 for a homeowner with a property worth $150,000.

The tax increase is still necessary because of the existing $400,000 budget deficit, said Troy Wentz, district business manager.

That deficit will exist even with the tax increase, Wentz said, and will add to the number of years the district has needed to use its general fund balance to cover that gap.

"You want to try to control that," he said.

The decrease in the budget came from a few factors, Wentz said.

Some of the federal funding the district receives, which typically has been used to purchase materials, will instead go toward covering teacher and staff costs, he said.

Plus, the district is planning to offer special-education services through the district schools, instead of contracting with the Lincoln Intermediate Unit.

No programs or staff members will be cut with the new budget, Wentz said.

The board will vote to adopt the final budget at its meeting Tuesday, May 27, Wentz said.

— Reach Nikelle Snader at nsnader@yorkdispatch.com.