The Southern York School District approved a final budget that raise taxes 1.98 percent Thursday night.

The tax hike is just below the state imposed tax cap of 2 percent, the fifth straight year the district has held the tax increase to less than the maximum set by the state.

The 1.98 percent property tax hike takes the tax rate to 17.51 mills, translating into a $34 tax hike for the owner of a $100,000 home and a $51 tax hike for the owner of a $150,000 home.

District officials said the tax hike was needed because of a $2.1 million increase in expenditures. Those increases include an increase of $1.7 million in the district's retirement contribution, an increase of more than $350,000 in medical insurance costs and a 12 percent increase in special eduction costs.

Southern took several steps to reduce costs, including restructuring debt payments, reducing utility bills and funding set aside for legal services and tuition reimbursement.

Also, six staff positions will not be filled through attrition. In the past six years, 45 positions were not replaced.

The budget also calls for using $1.8 million of the district's fund balance, including $300,000 which was previously designated for retirement contributions.

"This budget is mindful of our responsibility to maintain an excellent education for our students, yet sensitive to the current economic conditions," said Superintendent Thomas Hensley.

The district had raised taxes by 1.32 and 1.96 percent the past two years.