School board OKs 2018-19 budget with tax hike
By a vote of 8-1, Northampton Area School District Board of Education voted June 11 to adopt the 2018-19 final general fund, athletic fund and food services budget.
The 2018-19 general fund is $107,003,305. The athletic fund is $219,125. The food services fund is $2,446,795.
The general fund budget is increasing 4.15 percent from the 2017-18 general fund budget of $102,242,322.
To support the 2018-19 general fund budget, a property tax increase of 1.06 mills, or 2.01 percent, was approved, increasing the 2017-18 millage rate from 52.77 to 53.83 mills.
Based on the 2017 average NASD assessment of $58,223.43 and a 2017 tax bill of $3,072.45, the 2018 property tax bill would increase to $3,114.17, for a $61.72 annual increase, $5.14 monthly increase or $1.29 weekly increase.
Also approved as part of the 8-1 vote was the Act 511 Local Tax Enabling Act with a per capita tax of $5, real estate transfer tax of 0.5 percent and earned income tax of 0.7 percent — each of which is unchanged.
NASD school directors voted unanimously 9-0 to approve the 2018 homestead and farmstead real estate tax reduction amount at $113.10 with a 2018 homestead and farmstead real estate assessed value reduction at $2,101.
The school board also voted 9-0 to approve separate collective bargaining agreements, effective July 1 through June 30, 2021, with the Northampton Area Maintenance Association and Northampton Area Custodial Association.
The average wage increase in the three-year contracts is 3 percent for the district’s 42 custodians and 15 maintenance workers. Starting salary for custodians is $19.84 per hour. Starting salary for maintenance workers is $22.55.
Voting against approval of the 2018-19 budget was school Director Dr. Michael Baird.
When asked by The Press after the June 11 meeting why he voted against the budget, Baird said, “We’re using the $400,000 from FedEx, and we don’t know if we’re going to have it.”
After the meeting, NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Terry Leh said a certificate of occupancy for the FedEx Ground facility is expected to be issued in August.
According to the website of The Pennsylvania Code, which is an official publication of the Commonwealth of Pennsylvania, a building code official issues a certificate of occupancy within five business days after receipt of a final inspection report that indicates compliance with the uniform construction code.
Kovalchik and Leh anticipate NASD will receive $1.2 million in annual commercial real estate tax revenue from FedEx Ground. They expect the first payment of $400,000 to be paid to NASD in March or April 2019.
“We’re trying to give the FedEx Ground revenue back to the local taxpayer,” Kovalchik told The Press after the meeting.
If, for some reason, the FedEx tax money isn’t forthcoming, the anticipated $400,000 would be taken from the NASD fund balance to make up the difference in the 2018-19 district budget.
Before the budget vote, Baird asked Leh what measures he took to reduce the budget hike to 2.01 percent.
“I have a complete list of 32 items to get to that point,” Leh replied.
Baird asked about an increase in expenditures in the final budget.
Leh explained, “Expenditures were up because of the rate change in the charter school formula and the addition of a special education instructor.”
To trim 2018-19 expenditures by $500,000 and get the tax hike to the 2.01-percent increase approved by the board of education — in addition to the $400,000 FedEx Ground taxes, which will be put under interim local revenue in the budget — Kovalchik and Leh recommended reducing the NASD 2018-19 contingency fund by $100,000, from $400,000 to $300,000, which the majority of the board supported.
Other factors contributing to reducing the tax hike included the retirement of six professional staff teachers in NASD, allowing new teachers to replace them at lesser salaries.
“All of the staff that retired, we’ve replaced,” Kovalchik emphasized after the meeting.
If kindergarten enrollment increases more than anticipated on opening day of school, Aug. 27, an additional kindergarten teacher may need to be hired, with the salary paid from the contingency fund.
The projected FedEx Ground commercial tax revenue is a big factor in reducing the tax hike.
In a phone interview June 4 with The Press, Kovalchik said, “The district has said all along that if we would see an increase in commercial revenue, we would still provide our students with a quality education but do everything possible to reduce the local residents’ contribution.”
The school board meets 6:30 p.m. June 25, July 16 and Aug. 13 and 27 in the NASD Administration Building, 2014 Laubach Ave., Northampton.