Hermitage residents will save about $7.50 on their property taxes after Hermitage school directors decided to lower next year's tax increase by 1/4 of a mill during a special meeting Thursday evening.

The Hermitage school district re-opened their budget at last night's meeting after receiving word from the state that they will receive about $126,000 in state subsidies included in the state's budget.

School boards across Pennsylvania are reopening their 2002-03 budgets to account for higher subsidies included in the state's budget. School boards had to adopt their spending plans before the state budget passed.

"We looked at all the numbers and contacted the department of education. We were given a number, but weren't given a firm number. We were told the numbers could fluctuate depending on the state budget," said Duane Piccirilli. "We wanted to save the taxpayers money, but we wanted to be fiscally prudent in case we don't get the full amount once the state budget passes. So we only went down a quarter mill."

In June, school directors approved a 3.75-mill tax increase, that will now by 3.5 mills

Approximately $54,000 of the state money will go toward the tax reduction and the rest -- about $72,000 -- will go to pay down debt, according to Business Manager Eugene Fornadel.

The preliminary budget of $20,792,770 which was unveiled in May, will go up to about $21,000,000 with the increased state funding, Fornadel said.

Last year, Mercer County commissioners changed the property tax assessment ratio from one-third of a property's 1970 market value to 100 percent. The move essentially slashed millage to a third of its former level.

Taxes are currently set at 129.75 mills, which translates to 43.25 mills under the new ratio. A 3.5-mill increase puts millage at 46.75, an increase of about 8 percent.

A mill is $1 for every $1,000 of a home's assessed value. The old increase would cost a taxpayer with a home valued at $30,000 an additional $110 a year to about $1410. Under the adjusted millage increase, the taxes would come to about $1402, Fornadel said, adding that 1 mill brings in about $217,000, he added.