The first draft of Lehighton Area School District’s 2022-23 budget, unveiled Monday night, features a $563,457 deficit that officials hope can be whittled down without the use of the fund balance as state subsidies come into clearer focus and additional staffing needs are prioritized.

With revenues of $45.07 million and expenditures of $45.64 million, the budget does call for a maximum property tax increase of 4.7%, though that could also be scaled back by the time a proposed final budget is adopted in May.

“This is the first night for our review of the budget and there is certainly a lot to digest,” Director Jeremy Glaush said. “I think the one thing everyone was adamant about was not using the fund balance.”

Business Administrator Edward Rarick said most of the budget, such as contracted salaries and benefits, is non-negotiable.

“We calculated around $43.82 million, which is about 96.5% of the budget, is required to operate,” he said.

Numerous budgetary considerations, he added, had to be taken into account while developing the spending plan. They included an expiring teachers’ contract on Aug. 31, an expiring Act 93 contract on June 30, the future installation of a traffic signal at Ninth and Bridge streets (estimated at $349,000), rising costs of goods and services, continued escalation of health care costs and mandated costs such as retirement benefits and special education, unknown appropriation increases from the state budget, a pending need to address curriculum, pending litigation against the district and adequate staffing to meet the needs of students.

Staffing needs

Five years ago, the district had 330 staff members and has seen a 23% reduction since that point, taking it down to 255.

Rarick developed the 2022-23 budget including all 11 new additional staff members over the current year’s count. They include two 10-month secretaries, one high school math teacher due to high class sizes, one high school STEM/technology teacher, one middle school family consumer science teacher, one middle school reading specialist, one elementary center music teacher, one elementary center math teacher, one elementary center classroom teacher, one certified nurse and one addition to the business office.

“Adding all 11 of these positions would cost $835,000, factoring in salary and benefits,” Rarick said. “They were all put in this budget, although I don’t think it makes sense to add them all in one year. I think doing a more streamlined approach of several each year is the better option. But one thing we can’t do is ignore this because these are needs that are impacting the education of our students.”

Taxes versus expenditure growth

Lehighton raised property taxes 4.2% in 2021-22 and 3.6% in 2020-21, but before that, Rarick said, expenditures were increasing while tax rates were not.

“From 2010-20, there were eight years where taxes were not increased,” he said. “Expenditures meanwhile increased an average of 2.3% per year. At the same time, the district added $3.8 million in annual debt service payments. If you kept operating with a 2.3% expenditure growth coupled with no additional revenue, you would deplete an 8% fund balance in two years. By year three, you would be operating at a $2.5 million deficit.”

Over the past decade, Lehighton has raised its taxes 3.31 mills. During the same period, Jim Thorpe had a 1-mill increase, Weatherly had a 8.38-mill increase, Palmerton had a 8.63-mill increase, Panther Valley (Carbon properties) had a 9.76-mill increase and Panther Valley (Schuylkill properties) had a 11.09-mill increase.

Each mill in Lehighton generates $374,000 at current collection rates.

If the proposed 4.7% increase for 2022-23 stood, a Lehighton property owner with an average assessment would see their bill increase by $141.

Other budget highlights

Regular education makes up 42.7% of the district’s budget and Rarick accounted for a substantial increase in salaries and benefits, $1.569 million, for 2022-23.

The district spends around $7.69 million each year on special education, making up 16.9% of its total budgeted expenditures. Of that, students in placements such as Behavioral Health Associates or Carbon County Intermediate Unit programs represent 32% of expenditures.

“Our special education budget this year represents a 2.4% increase over prior year expenditures,” Rarick said. “We have $892,632 budgeted for special education cyber/charter school tuition.”

Charter/cyber school tuition as a whole constitutes $2.57 million, or 5.7%, of Lehighton’s budget.

The maintenance services portion of the budget is up $132,635, mainly due to salary and benefit increases, and the rising cost of goods and services.

Lehighton is expected to make $3.8 million in debt service payments in 2022-23, making up 8.36% of its budget.

In terms of health care, Lehighton is a member of the Public School Health Insurance Cooperative. Rarick said the district’s average cost per member each month is $1,295.85, the most out of any district in the cooperative.

“Right now, 97% of an employee’s health care is paid for by the district, with 3% paid by the employees,” Rarick said. “If nothing were to change with our health care by 2026-27, it would be costing us another $2 million per year.”

What is next?

Lehighton will continue to review the budget leading up to a May vote on a proposed final budget and a June final adoption.

“Tonight’s first draft is the culmination of months of work,” Rarick said.

“The process started in November and it really goes beyond final adoption in June. It can’t be something you approve in June and then don’t look at for six months. It is continually modified and evaluated to meet needs of students.