HARRISBURG -- School districts in Mercer County are slated for some relief from the burden of higher retirement system costs under legislation approved late Wednesday by state lawmakers.

The bill to refinance retirement system costs will spare school districts across the state from having to absorb the full scope of hefty pension-cost hikes in the next fiscal year. The bill passed by the House and Senate also provides a two-tier cost-of-living increase for retired school teachers and retired state employees.

As a result of the pension changes, school boards may not have to hike property taxes or cut programs as much as had been feared when the Public School Employees Retirement System approved a five-fold increase in the contribution rate for school districts last December.

What impact the change will have on local school districts wasn't immediately clear. Attempts by The Herald to contact local school officials for comment today were unsuccessful.

The need for the contribution hike was attributed to the increased costs tied to a pension hike approved last year for current teachers, state employees and state lawmakers and to unanticipated poor returns on public pension fund investments.

The legislation basically extends the period for which school districts have to pay a higher contribution rate to the retirement system from three years to five years. Thus, the new contribution rate for 2002-03 is 1.15 percent under the bill. The contribution rate set last December was 5.64 percent.

In a nutshell, the legislation offers districts the proposition of save now and pay later as well as steps to stabilize contribution rates over the five-year period. The bill also provides a two-tier cost-of-living increase to school retirees and state employee retirees. Basically, retirees whose date of retirement is prior to July 2, 1990, get a COLA this year. Post-1990 retirees get a COLA in 2003.

The retirees have complained they were left out of a pension boost approved last year for current state teachers, state employees and state lawmakers and have scheduled a rally later this month at the Capitol.

New legislation in Harrisburg reduces the amount of money local school districts are expected to pay into the state teachers retirement system from 5.64 of payroll to 1.15 percent.

The following are estimates of what districts will pay under the new legislation, with the previously projected contribution in parenthesis.

Commodore Perry -- $17,000 ($87,000)

Farrell Area -- $48,000 ($236,000)

Greenville Area -- $44,000 ($219,000)

Grove City Area -- $74,000 ($362,000)

Hermitage -- $63,000 ($312,000)

Jamestown Area -- $17,000 ($87,000)

Lakeview -- $33,000 ($162,000)

Mercer Area --$38,000 ($189,000)

Reynolds -- $43,000 ($212,000)

Sharon City -- $73,000 ($358,000)

Sharpsville Area -- $32,000 ($158,000)

West Middlesex Area -- $34,000 ($169,000)