2.69% tax hike likely: School board is polled on budget
Based on a straw vote of 7-1 by the Northampton Area School District Board of Education, a tax hike of 2.69 percent for the district’s 2019-20 general fund budget appears likely.
Seven school directors, in an informal poll taken by NASD Business Administrator Terry Leh at the April 29 school board meeting, said they support the administration-backed 2.69-percent tax increase.
School Director Roy Maranki was the lone holdout, voting instead for a 1.99-percent tax hike.
School board President David Gogel did not attend the meeting because he became ill after speaking at the new Lehigh Elementary School groundbreaking ceremony that preceded the board meeting, held in the current Lehigh building’s multipurpose room.
If the school board votes as indicated in the straw poll at its next meeting, set for 6:30 p.m. May 6 in the administration building, 2014 Laubach Ave., Northampton, the proposed tax hike would be lowered from 3.79 percent, which the board approved in the preliminary budget vote at the Jan. 28 meeting, to 2.69 percent, which the administration proposed at the April 8 meeting.
The administration and school board are on track for the budget timetable: adoption of the 2019-20 proposed budget, May 6; advertisement of the final budget by May 31; and adoption of the final budget, June 10. School district budgets are required by commonwealth law to be approved by June 30.
Of the planned May 6 board vote on the 2019-20 proposed budget, NASD Superintendent of Schools Joseph S. Kovalchik said to school directors, “That’s not the final budget. You still have 30 days until June 10 to vote.”
After the April 29 meeting, Kovalchik said the 2.69-percent increase would result in a “status-quo budget.
“We’re not adding personnel. We can replace retirements with no new positions. We can continue our existing programs with no new programs,” Kovalchik said.
For the straw vote, Leh and Kovalchik offered school directors three options: tax hikes of 2.69 percent, 2.28 percent or 1.99 percent.
The 2.69-percent tax hike would keep the increase below the Pennsylvania Department of Education (PDE) 2019-20 Act 1 Index for NASD of 2.8 percent.
The PDE approved the NASD request for exceptions allowed under Act 1, whereby the district could increase the tax rate more than 2.8 percent. The PDE also approved NASD exceptions in previous years. To date, NASD has not implemented an exception.
The 2.69-percent tax hike is a 1.45-mill increase, from 53.83 mills to 55.28 mills.
Based on the 2018 average assessment of $59,444, which comprises 70 percent of the district, and a tax bill of $3,199.87, the new tax bill would be $3,286.06. That’s a $86.19 annual increase, $7.18 monthly increase and $1.66 weekly increase.
Prior to the straw vote, Kovalchik said reducing the 2.69-percent hike to 2.28 percent “would be arrived at by taking funds out of district school buildings’ budgets, cutting some field trips and having more than 30 students per classroom.
“If you want to go below 2.28 percent, then we’re talking teacher cuts,” Kovalchik said.
Before the straw vote, school Director Chuck Longacre said, “I think this has been a pivotal year for the district in academics and athletics.
“It’s not been good financially,” Longacre continued. “The commercial dividend came in lower than anticipated. Our bond rating was cut, and we wound up paying bond insurance. We’ve been tapping into the fund balance too often.
“The middle school project was $5.1 million under budget. We’ve been using that money wisely at Siegfried for HVAC and the roof. That money is gone,” he said.
“We identified $3.2 million in additional repairs at facilities. We don’t have the money. The biggest thing is the high school roof, which is leaking,” Longacre continued. “We’ve had to delay that a year.”
Replacement of a portion of Northampton Area High School roof is expected to cost at least $2 million.
“We need to look at the district in the near term and long term,” Longacre said.
School Director Dr. Michael Baird said, “We’re funding the school district, but we’re putting Band-Aids on the problems. Where are we going to be five years from now?”
To achieve the 2.69-percent hike, Leh and Kovalchik said the 2019-20 general fund budget was lowered by a net reduction of $653,000.
Factors they cited to achieve the reduction were:
Local revenue increases in real estate and Access funds reduced the budget by $411,000.
Ten professional staff retirements were replaced, reducing the budget by $389,000.
Administrative building and department reductions of 10 percent reduced the budget by $356,400.
The 2.69-percent increase includes the PDE-mandated positions of one high school guidance counselor, one high school special education teacher (funded through Access), one middle school special education teacher (funded through Access) and one elementary school special education teacher (funded through Access).
In addition to the tax increase, which would generate $1,605,465, the district would use $3,420,000 from the district fund balance to balance the 2019-20 budget.
The 2019-20 preliminary general fund budget, as presented in January, has expenditures of $110,718,113 and revenue of $105,039,391, for a deficit of $5,678,722.
The athletic fund is $251,935. The food service fund is $2,414,163.
The 2019-20 budget was unveiled by Kovalchik and Leh at the Jan. 14 board of education meeting.
The 82-page preliminary budget can be found on the NASD website, nasdschools.org.