Charter school costs and medical benefit increases figure to be the biggest increases in a Palmerton Area School District 2021-22 budget that is still in the working stages.

Palmerton’s board got a look at the proposed budget as it currently stands Tuesday night, with Business Manager Ryan Kish outlining an expected $35.12 million in expenditures and a revenue figure that will fluctuate depending on what directors decide in terms of any real estate tax increase.

The district’s budget gap before any tax increase is estimated at $2.33 million, but using $1.6 million from its fund balance could drop the deficit to $691,000, which is exactly how much Palmerton could generate by a 4.2% tax increase, the most it is allowed by the state.

“There are still a lot of moving pieces to look at right now,” Kish told the board Tuesday. “Our health care projections are not finalized and there is a good chance charter school estimates will change by May.”

Medical benefits are projected to increase by $401,000 in 2021-22, while charter school costs are estimated to go up $200,000.

“The experts in the industry are telling us to plan for increased health care costs this year because those people who were not getting procedures done or going to the doctor in 2020 because of COVID-19 now may be more likely to do those things,” Kish said. “Charter school payments have wreaked havoc on budgets across the state. We are budgeting an additional $200,000 for 2021-22, but that is conservative. Right now, we’re hoping by May that it looks like the district may get some students back from outside cyber charter schools, but if we get to the spring and that doesn’t look like it will be the case, we may have to adjust that budget number.”

Kish said Palmerton has seen a slow trickle of students come back from outside cyber charter schools during this school year.

Other major estimated increases in the budget are salaries, set to go up $290,000, and the district’s contribution to the Public School Employees Retirement System, which will increase $157,000.

Palmerton is budgeting for two additional teachers, a technology teacher at the high school and an elementary special education teacher at S.S. Palmer/Parkside.

“We really need the technology teacher,” high school Principal Paula Husar told the board on Tuesday. “If we would have had a normal year this year, I don’t know how we would have met graduation credits for technology. If we don’t get a technology teacher, we’ll have to look at lowering the credits for kids to graduate with their technology stipulation. There are no ifs ands or buts about it.”

Gov. Tom Wolf’s proposed 2021-22 state budget includes an initiative to distribute all existing state- level basic education funding through a student-weighted formula. Kish said the new way of running numbers through the basic education formula would create winners and losers. Palmerton would be one of those losers, he added, seeing just a 2% increase from the state compared to 130% in Jim Thorpe and 30% in Panther Valley.

“It’s likely, however, that the proposed state budget is essentially dead on arrival in the Republican controlled legislature,” Kish said.

The board was given several scenarios Tuesday in terms of a real estate tax increase, should it choose to go that route.

A 4.2% tax increase, the maximum allowed by the state under the Act 1 index, would increase payments by $102 for the average taxpayer in the district and generate $691,000 in revenue.

A 1 mill, or 1.7%, tax increase would increase the bill by $43 for the average taxpayer, while a half-mill increase, or 0.9%, would lead to a $22 increase.

Palmerton raised taxes 1.8% last year after two years of not increasing taxes.

The district’s proposed final budget is normally approved in May with a final budget approval coming in June of each year.