The Southern York school board has decided not to exceed its state-assigned tax cap for the 2014-15 school year.

But the school board still needs to figure out how to address a $1.3 million budget deficit.

That deficit was included in a budget presentation made to the school board last week by Wayne McCullough, the district's chief financial and operations officer.

The deficit is mostly the result of higher health care costs and higher pension contributions, McCullough said.

The district can raise property taxes 2.5 percent without approval from voters or special permission from the state, and the school board has decided to hold any tax hike to that amount.

A 2.5-percent tax hike would take the district's property tax rate to about 17.95 mills, the equivalent of a $66 tax hike on a $150,000 home.

McCullough said he'll have more information to share on the proposed budget next month, after Gov. Tom Corbett's budget address reveals how much state funding the district might receive.

Southern raises taxes 1.98 percent last year, just below its 2013-14 tax cap, marking the fifth straight year of tax increases less than the maximum allowed by the state.

The district has raised taxes 1.32 percent and 1.96 percent in the previous two years.