Rising health care costs are a major contributor to an expected $3.4 million deficit for the Ascension Parish school district when the fiscal year ends July 31, Business Services Director Diane Allison told school board members this week.

“The money we’re getting in for insurance is not covering claims,” Allison said at Tuesday’s finance and curriculum meeting of the board.

Last year, the School Board transferred $6 million into its health care fund to cover costs, Allison said.

“This year, we’ll have to do it again,” she said.

Allison said the rising costs come with the federal Affordable Care Act, mainly in its requirement that children be covered up to age 26 and its expanded coverage for various medical treatments.

Looking ahead to the next budget year, for 2016-17, Allison said that while one source of revenue — property taxes — is increasing for the school district, two other funding sources, state funding and sales tax revenues, are decreasing.

Property taxes for 2016-17 are expected to increase by 7 percent over the projected revenues for the current fiscal year, Allison said.

Sales tax collections, however, are declining, as the $2.2 billion expansion at CF Industries draws to a close, she said.

Sales tax revenue is expected to come in at approximately $66 million for the 2016-17 budget. The revenues have been as high as the $71.2 million the school district saw in 2014-15, when the CF Industries plant expansion got under way.

State funding also is expected to decline in the next budget year, in light of the state’s financial crisis.

Allison said estimates show a 5 percent decline, a decrease of $4.5 million, in state funding.