The Hanover Public school board recently approved a tax increase after forgoing a tax hike last school year.
The board agreed to a 2 percent property tax increase for the 2012-13 school year.
That will increase the property tax rate from 19.07 to 19.45, a 0.38-mill increase that will cost a $100,000 homeowner an extra $38.
The 2 percent hike is right at Hanover's state-imposed cap. Board members Steve Edwards and Darlene Funk were the lone dissenters in the vote.
The $27.6 million budget included increasing costs for retirement contributions and charter school tuition, leading in part to the tax hike, said business manager Troy Wentz.
Wentz said cyber charter tuition, which is about $1.3 million in next year's budget, is tougher for Hanover to swallow in recent years since the state stopped partial tuition reimbursement.
The district is going to use about $795,000 of its fund balance to help even out the budget, he added. Even more surplus would be needed if Hanover didn't raise taxes, he said, and then that surplus wouldn't be around in coming years when pension contributions are expected to double.
A small tax hike next year helps Hanover slowly build up some funding for the upcoming cost spikes, since it's not possible under Act 1 property tax reform to do one huge tax hike.
"You can't make it all up one year," Wentz said of tax revenue.
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