The reassessment of the struggling Pittsburgh Mills in Frazer Township delivered a major financial blow to the Deer Lakes School District.
As part of a Tax Increment Fund (TIF), the district was receiving annual one million dollar payments from excess Pittsburgh Mills tax revenues made over 20 years.
Because of a recent reassessment of the retail property, that annual payment to the school district was reduced to $430,000.
Deer Lakes superintendent Dr. Janelle Logue-Belden called the 57 percent drop devastating.
"Our school board, administration, we've put together programs over the last six years that have really led the way for our students," she told the News Radio KDKA Morning Show. "We're very proud of the financial things that we've been able to do, and now with the Pittsburgh Mills Mall being valued at $145 million and down to $10 million, it has absolutely crushed tax revenues."
In addition, the school district says it had to refund over $1.3 million to major Pittsburgh Mills businesses like Macy's, Pittsburgh Mills Auto Properties and Lowe's.
Allegheny County Economic Development Director Lance Chimka highlighted this agreement was put in place in the 90's by people who generally don't hold those positions anymore.
He says TIF agreements have their advantages and drawbacks.
"When it works well, it works great," he said. "You can fund the infrastructure needed up front over the course of the development and spread those payments over the course of the development. When it doesn't work, there are some serious financial difficulties to try and overcome."
In a letter to families, the district also pointed to financial difficulties as a result of cyber charter school costs and increasing benefit expenses.
To help make up the difference, the Deer Lakes School Board preliminarily approved a 3.7 percent mill increase in property taxes. A final budget will be approved next month.
Logue-Belden says even a tax increase won't make up the entire deficit.
"It's not going to accumulate the loss," she said. "So, we're going to have to cut programs or staffing, which is going to be detrimental to our district."
Logue-Belden called upon the county to work with the district to reach a solution.
Chimka says all of the stakeholders will continue to work together, but he believes the best solution lies in a settlement with bond holders.
"What we all need to do as taxing bodies is come to the negotiating table in good faith and try and solve the problem," he said.