Property taxes are set to rise by 4.6% in Palmerton Area School District after its board of directors approved a 2022-23 operating budget by a 7-2 vote Tuesday night.

The plan calls for expenditures of $38.31 million with Palmerton pulling about $2.1 million from its fund balance to help balance the budget.

“I think it’s a good budget and you’ll do well with it,” Dr. Alan Lonoconus, interim business manager, told Palmerton’s board prior to the vote. “What you do tonight will have an impact over the next few years.”

All board members except Brandon Mazepa and Doris Zellers, both of whom participated in Tuesday’s meeting virtually, voted in favor of the budget.

The property tax increase, which equated to 2.7 mills, was the largest the district could adopt by law under the state’s Act 1 index. It will generate an additional $826,000 for Palmerton in 2022-23.

A Palmerton homeowner with an average assessment of $44,000 will see a $121 increase on their tax bill this year as a result of the move.

Over the last few months, Lonoconus attributed the district’s budget gap to a variety of factors, namely charter school tuition costs that remain high, increased retirement contributions, anticipated rises in medical and dental insurance payments, and escalating everyday costs such as fuel and utilities.

“The slice of the pie you can actually control as a district is pretty small,” he said.

Over half of the current budget, 66% to be exact, is made up of salaries and benefits, he said. Of the rest, 14% is made up of utilities, equipment, dues and fees; 6% is for bonds; 6% is for professional services; 5% is for transportation and 3% is for supplies.

Increases over last year, according to Lonoconus, include an additional $215,000 for salaries and $100,000 for contributions to the public school employees retirement system.

The district also budgeted for an additional one-and-a-half special education positions to remain in compliance with the state based on the student-teacher ratio. According to a presentation earlier this month from Suzanne Rentschler, Palmerton’s special education director, the district had 401 special education students as of Dec. 1. That population grew to 437 by June.

The district plans to use Elementary and Secondary School Emergency Relief money, federal grant funds provided to help offset COVID-19 pandemic hardships, to offer salary and benefits to long-term substitute teachers through the 2023-24 school year to try to solve a substitute shortage issue. It also hoped to use the grant money to fund an additional math coach and guidance counselor at the elementary level, as well as a district wide social worker.

Palmerton projected about $1.76 million for charter costs next year, Lonoconus said, based on the trends of the last few years.

On Tuesday night, the board approved a cost savings program with Behavioral Health Associates.

“By paying in advance,” Lonoconus said, “we can anticipate a savings of around $130,000 next year with BHA.”