While a 4.6% increase has been approved for the 2022-2023 school year, residents who live in Northern Lehigh School District likely won’t see that big of a property tax increase.

On an 8-1 measure, the school board on Monday adopted the proposed final budget for the 2022-2023 school year in the amount of $37,650,443. Director Robert Keegan Jr. was opposed.

That calls for a millage rate of 24.5768 in Lehigh County, and a millage rate of 70.2118 for Northampton County.

Superintendent Matthew J. Link said the district is projected to end the year with a $12.6 million fund balance.

Link discussed the charter school yearly cost, and said the district is projected to end the year with paying $1.68 million to charter schools, which would be down a little bit from last year.

Sherri Molitoris, director of Business Affairs, Business & Human Resource Officer, noted the current budget does have 4.6% Act 1 tax increase in it, which will be additional revenues for the district of $630,424.

Molitoris said this is the limit for the district to raise taxes.

“It does not mean that the board is going to settle at this tax rate,” Molitoris said. “They have until the June board agenda where they can reduce it to the percentage of tax increase that they would like passed for it if a tax increase is warranted.”

Planning and fund balance

Link said the school board would have a conversation on if it wanted to do a long-term debt restructuring with or without additional monies.

“If they choose to go with additional monies, there are some ways that we can address some of the projects on this list,” Link said.

Link said some of the projects they are considering include the replacement of the large utility shed or pole building ($100,000); Peters gym wall ($130,000); chillers at Northern Lehigh High School ($200,000); and baseball/softball fields upgrades ($1 million).

“That million dollar projection, we recently received updated quotes on that; we’re probably looking at anywhere from closer to $2 million all the way up to as high as the board would want to go,” Link said. “We are not recommending that they go that high, but we should consider some fixes to the baseball and softball complex.”

Expenses vs. revenues

Molitoris said total expenses are at $37,650,443, while revenues total $36,231,519, with the 4.6% tax increase.

The fund balance for $369,741 is money the district set aside for yearly increases in Public School Employees’ Retirement System and medical costs.

Molitoris said that leaves a budget shortfall of $1,418,924, and added there is local revenue built in there at 4.6%.

With a budget shortfall of $1,788,665, Molitoris said PSERS, reduced by $157,416 and medical (reduced by $212,325) leaves them at $1,418,924 short.

She said if the district would have to use fund balance to fund all of the full $1,788,665, its fund balance projected to end at the end of the 2022-2023 school year would be $10,829,159.

Link said administrative recommendations are to consider bond refinancing for restructuring debt and potential additional money for district projects; consider a tax increase and utilization of fund balance to generate some revenue for the upcoming year; continue to look for grant revenue opportunities to fund positions such as school police officer and social worker; and continue to search for expenditure saving options such as utilities, transportation and staffing.

Tax impact

Molitoris said that as the 4.6% increase is currently in the budget.

Under that scenario, she said that Lehigh County with a home assessed at $149,000 would pay $151 more and a Northampton County home assessed at $45,850 would pay $165 more.

Molitoris said that Lehigh County is assessed at 100%, while Northampton County is assessed at 50%.

She said that Lehigh County in 2018 went through a full county reassessment, so their reassessment values went from 50% to 100% at that point in time, so that’s why there’s a difference between the two counties.

Molitoris said if they raise to 4.6%, the district will realize $630,424 in additional tax revenues.

Board reaction

Director Donna Kulp said she would not want to see the final budget include a 4.6% increase.

“I have no desire to go to the top limit,” Kulp said. “I’d like administration and the board to consider coming down a little from the (4.6%) increase.”

Board President Mathias Green said they are approving the maximum amount right now to be on the safe side.

“This is the maximum amount that we can raise the taxes,” Green said. “No one is saying that is going to be that amount; that’s the maximum we can do it.”

Director Chad Christman said he is also against a 4.6% increase.

“I would be in favor of a combination of bond restructuring and possible fund balance if needed to bring that number as close to zero as possible,” Christman said.

Keegan said the problem in Pennsylvania is that it’s all on the property owner or the homeowner.

“Until the state Legislature changes the tax structure and takes the major burden off the property owner, we’re kind of stuck,” Keegan said. “I don’t like to raise taxes, and I have voted no many times because of that and it’s not to hurt our community, or to hurt the district and our students, but it’s a protest against what this state Legislature has done in the past and continues to do, and until they change the tax structure, we are really bound to raise taxes at a certain level every year or we even get less money from the state.

Keegan added that it’s really the state Legislature that can make the changes that need to happen across the state.

“We’re not the only school district in this amount of trouble when it comes to the finances,” he said. “Not that we’re in a lot of trouble, but there are other districts around us that are in far worse shape financially than we are.”

Keegan said he’s not in favor of 4.6% either.

“But, at some point we have to have a budget, and it has to be able to pay for the bills, and at some point we’re all going to vote,” he said.

Last June, the board approved the budget with a 2% increase.