Commodore Perry School District officials will raise real estate taxes 3 mills if a preliminary budget passed in May doesn’t change by the June 30 deadline.

The $8,115,440 proposed spending plan includes a $551,400 shortfall that is tentatively going to be covered by dipping into the district’s fund balance, business manager Robin Johnson said.

It’s projected that the fund balance will have $1.08 million at the end of this year, Mrs. Johnson said, so there is enough money there to cover the potential shortfall.

Mrs. Johnson said the board hopes to not need to impose a 3-mill tax hike and that they continue to work on the budget. She said things will likely be “ironed out” at tonight’s work session.

A vote on the final budget will be taken at Monday’s regular meeting.

The preliminary budget includes no job cuts and reinstates a part-time speech teacher, a position that was contracted with Midwestern Intermediate Unit IV, Grove City, this year, Mrs. Johnson said.

A big area of increased expense for the district is transportation costs, which are up about $170,000 in next year’s versus this year’s budget. The ever-escalating price of gasoline is especially felt at Commodore Perry, which covers 74 square miles in Sheakleyville and Deer Creek, Sandy Creek, Salem, Otter Creek and Perry Township.

Under Act 1, the district can raise taxes up to 6.3 percent or 3.15 mills, Mrs. Johnson said. One mill of taxes brings about $32,000 to district coffers, she said.

Eligible homestead/farmstead owners will see a $136 credit on their tax bills under Act 1. The district will be getting $180,349 from state gaming money to offset property taxes. The program is revenue neutral for Pennsylvania school districts.

The board raised taxes 2 mills last year to cover the 2007-2008 budget of about $7.7 million. The district projected using about $444,000 in reserves to balance the budget, but Mrs. Johnson said it’s not certain how much of that will be needed.

A mill is $1 for every $1,000 of a property’s 1970 market value.