Sharon school directors are thinking ahead to their budget for 2002-03 because they will need at least $300,000 more for the year.

Business Manager James Wolf told directors Wednesday they are going to have to come up with an extra $200,000 for the pension fund and between $100,000 and $150,000 to cover rising insurance costs.

"It's going to be a tough budget year. This next budget is going to be very difficult," Wolf said.

Other Mercer County school districts will also have to pay more into pension funds because of a combination of poorer-than-anticipated returns on pension-fund investments and increased costs tied to a boost approved last spring for teachers, state employees and state lawmakers.

Grove City Area School Board reportedly is facing an increase close to the size of Sharon's.

Sharon City Schools paid about $55,000 into the retirement fund last year and spent about $1.3 million on insurance, Wolf said.

The district is also negotiating teacher contracts which expire in June, Wolf said.

Because of the work ahead, Director Dominick Russo asked if budget meetings could start earlier than April. Director Kathy Hall agreed and requested the board start preparations sooner.

Each mill of property tax generates $33,000 to $34,000 for the district. If directors decide a tax increase is needed to cover the additional costs, residents could face an 8- to 10-mill tax hike. Each mill costs the average taxpayer about $5.

Directors also heard an audit report for 2001-02. John Mastrian of Black, Bashor & Porsch, Sharon, said there were no reportable issues. He said the district's audit reports have improved.

Mastrian said the board did a good job of controlling expenses last year. He said the fund balance decreased by only $47,000 from $968,000 to $921,000. He said that is not large considering the district's budget totaled $19.8 million.

The audit also included a management letter that included suggestions, but not for anything that was done wrong, Mastrian said.