Rejecting a proposed tax increase, the Seneca Valley school board approved a preliminary budget Monday that holds the line on taxes for the first time in six years.

Board members voted 6-2 for the $89.6 million budget, with board members Ken Brennan and Jeff Widdowson voting against it. Board member Anthony Evans was absent for the vote.

The administration initially introduced a budget that included a 2-mill tax increase. That would have added $33.60 a year in taxes for a homeowner with a home assessed at $200,000.

Board member Tom Roth, who opposed the increase, pointed out the district's $15.5 million fund balance is higher than recommended by the Pennsylvania School Boards Association which suggests 5 to 10 percent of a district's total expenditures be placed in reserve.

At its current figure, the district's fund balance is about 18 percent of the district's expenditures.

With the 6-2 vote, the millage rate will remain at 129.6 mills for the 2008-09 year.

The $89.6 million proposed budget shows an increase of 4.5 percent over the current fiscal year, which has a $85.7 million budget.

Areas showing the biggest increases include administrators' salaries, up $1.3 million.

Transportation costs also are increasing by about $215,000. That estimate is based on the current $3.75 per gallon rate for diesel fuel and could change if fuel prices continue to rise.

Hospitalization costs also are expected to increase by $792,036.

Tuition for special needs students also is expected to rise by $280,797. The district's total special education budget for 2008-09 is expected to be $422,840.

Areas showing decreases are site improvements, down $34,500; equipment purchases, down $121,771, and debt service payments, down $160,141.

The district expects to generate almost $61 million from local revenue sources and another $25.5 million in state subsidy. Federal income is expected at $668,073.

The preliminary budget will be on public display at the district administration building during regular office hours for 30 days. Board members must vote on a final budget by June 30.