Matthew J. DeJulia is sickened by this year's school budget process.

The Hermitage school board member, acknowledging cuts the administration has made in the budget proposal, said there is little fat in the plan.

Even with the cuts, administrators are eyeing a 5-mill property tax hike that still leaves the district with a deficit.

"That makes me want to puke," DeJulia said. "That's 15 mills in the old system. In the old days, they would have hanged us for that."

Officials are working with a $21.9 million budget proposal, which is about 4 percent higher than this year's spending plan.

The board will be asked to adopt a tentative budget at its May meeting.

Superintendent Karen A. Ionta said the major expense increases are salaries, health care and retirement.

Ms. Ionta is budgeting a 35 percent hike in health-care costs, which increases the line item from about $2 million this year to $2.8 million.

The increase in retirement comes from the Public School Employees' Retirement System's decision to more than triple the subsidy school districts must contribute to the fund.

In Hermitage, that means a jump from $120,000 to $420,000.

Administrators said they have tentative approval to use money from the 2001 bond issue for "long-term items," which could provide a one-time infusion of $330,000.

Business Manager Eugene Fornadel said anything that lasts longer than five years is considered long-term, so that money could be used to buy textbooks, supplemental material and equipment.

The district has applied for grants and is looking into refinancing a previous bond issue, but Ms. Ionta said they are not factored into the budget.

The latest budget draft has a $1.1 million deficit, which could be paid by the district's fund balance -- a rainy day savings account -- but that would leave the fund balance at $123,000, which Ms. Ionta called unacceptable.

Accountants recommend maintaining a fund balance of 8 percent to 10 percent of the school budget, Fornadel said.

Administrators are eyeing cuts in field trips, conferences and travel, and slashing substitute teacher pay from $90 a day to $70, which Ms. Ionta said would save $60,000 a year.

Officials also are looking at staffing changes, but Ms. Ionta said she wants to talk to the staff before discussing her ideas publicly.

The current property tax rate is 46.75 mills. A mill is $1 for every $1,000 in assessed property value; assessments are a property's 1970 market value.

A mill of taxes raises about $217,000 for the district.

The district raised the millage by 4 mills for this year, but was able to reduce the rate by a quarter-mill over the summer with additional state subsidy.

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