Lawrence school board members Monday arrived at a property tax levy increase of 2 mills, less than half of a potential 5-mill increase presented last month.

“Zero or less would potentially be better for some people. However, I still think it’s a challenge,” board member Mark Bradford said. “It’s a challenge with what we’ve taken away (through cuts). This is how we put back a little bit, and unfortunately we have to do that through taxes.”

Board members will have a budget hearing for the 2010-2011 school year with public comment Aug. 9. After that the board could lower the mill levy but not increase it.

Administrators in late June presented projections and warned that property valuation in the district could drop as much as 1 percent to 3 percent, meaning it would take more mills to raise the same amount of dollars as the year before.

A mill is $1 in property tax for every $1,000 in assessed valuation.

But district administrators said Monday that the district’s total valuation is now only expected to drop 0.49 percent.

Also, the earlier budget scenarios built in an extra 2 mills in the district’s capital outlay fund for building projects, which is money that by law can’t be spent on general operations like teacher salaries.

After administrators said they were confident the district could handle planned projects and potential emergency repairs in the next year, board members decided against the extra 2 mills.

“If we can reduce some of the (economic) pressure by reducing the capital outlay levy, I think that’s something we should do,” board member Marlene Merrill said.

According to projections, an increase of 2.076 mills would cost the owner of a $200,000 home an extra $48 in taxes a year. Total school district taxes on the home would be $1,333.

Because of state funding cuts, the school board has already cut $4.6 million from its 2010-2011 budget.

Administrators say the 2 mill increase overall is due to a higher payment next year on principal for the 2005 bond issue, as well as added authority on the district’s local-option budget due to projected enrollment increases at the Lawrence Virtual School and among students who receive free and reduced-price lunches.