The Internal Revenue Service could decide whether residents in the Franklin Regional School District face a tax increase for next school year.

The preliminary 2008-09 budget was presented at Monday's school board meeting and it calls for a 1-mill tax increase to make up for a $325,000 shortfall.

But, that increase could be wiped away if the IRS allows the district to continue paying incentives for retirees over a five-year period. Those costs are currently $1.1 million in the proposed budget.

Finance director Dan Watson said he expects to hear from the IRS within the next two weeks on a request for a waiver to allow the district to continue continuing budgeting $200,000 a year for retirement.

An early retirement option offered about five years ago was accepted by 52 people requiring $200,000 a year for 10 years to pay out a total of $2.2 million to the retirees. Watson said the district is halfway through making those payments but the IRS wants them to pay off the remainder now.

If the district isn't allowed to make payments, officials could find another way to make up the increase.

Board member Paul Scheinert suggested using all of the district's $1.2 million fund balance available to reduce the needed increase to .38 mills. The current budget calls for about $888,000 to limit the tax increase.

One mill of taxes generates $325,000 in the district.

Among the notable expenses in the preliminary budget, is $697,750 in technology replacements.

Computers for middle and high schools and Newlonsburg Elementary School are scheduled to be replaced. The most expensive replacement is computers for classroom teachers at $170,000. Other replacements include new laptops for the district's computers-on-wheels program and computers for libraries in the district.

"We're finding that replacements costs are significantly more than anticipated," Watson said.

The athletic budget is increased by $45,138. Most of that comes from costs associated with adding boy's lacrosse as a school sport.

An increase in chemistry classes for next year means that technology coach Joe Baker will split his duties between the teaching and aiding teachers who are adjusting to Classroom of the Future technology.

That didn't sit well with board member Lynn Gurrentz.

"If these teachers don't have the support, how are they going to get over the hump?" Gurrentz said.

Charles Koren, director of human resources, said the decision to have Baker split his duties was made for cost reasons. Money from the state helped pay for Baker's role as a technology coach; however, the amount of state money for it has decreased each year.

"The grant has decreased for the coach position," Koren said.

It also would be difficult to find a part-time chemistry teacher who would stay with the district, Koren said.

Baker was a science teacher in the district before becoming a coach.

Gurrentz said she also was concerned about potential class sizes for the sixth grade. Early projections have between 21 and 30 students per class.

"You can't have any one-on-one interaction," Gurrentz said.

Superintendant Emery D'Arcangelo said the average number of students per class would be OK for that grade level.

"Twenty-five in a sixth grade class is a reasonable number," he said.

Koren agreed that the number of students per class wasn't as good as it could be but he said it was the best option for the district now.

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Budget meeting

Officials expect to vote on the preliminary budget and its 1-mill tax increase at the May 19 school board meeting.

The school board meets at 7:30 p.m. in the board room at Heritage Elementary School.

The tax rate could change depending on the response from the IRS. The final budget will be approved in June.