Taxpayers who live in the Palmerton Area School District could see a 12.6-percent increase in their property tax rates next year.

The school board on a 5-4 vote Tuesday agreed to adopt the 2011-12 preliminary budget, which as of now calls for a 5.5-mill increase in property taxes.

Directors Darlene Yeakel, Michael Ballard, Susan Debski, Clarence Myers and board President Barry Scherer voted in favor. Directors Carl Bieling, Carol Dwyer, Tina Snyder and Stuart Henritzy were opposed.

The $27,388,661 preliminary budget would raise the millage rate from 43.64 to 49.14 mills. That would mean a person with a home valued at $100,000 and assessed at $50,000 would pay $2,455, or about $275 more in property taxes to the district next year.

Resident Randolph Getz said he was concerned with the proposed spending plan.

"A lot of property owners are retired and living on Social Security," Getz said. "I just can't understand why we have to go to this amount of an increase for next year."

Getz then suggested the board consider potential program cuts to help offset the hike.

"I don't know of any cuts in programs in the district," he said. "I think it's about time you start looking at cuts."

But, Scherer stressed to Getz that the preliminary budget is not etched in stone.

"This is strictly a preliminary budget," Scherer said. "The administration is already looking at (potential) cuts."

Resident Russell Frank strongly urged the board to apply for all referendum exceptions for which the district qualifies.

"Why can't the district allow the taxpayers to vote whether or not we want a tax increase," Frank said. "You should let all of the citizens of this town vote if we can afford a 12-and-a-half percent increase."

As required by Act 1 of 2006, the board intends to seek approval from the Pennsylvania Department of Education, or the Carbon County Court, for all referendum exceptions for which the district qualifies.

On written request by any school district resident or taxpayer, the district will provide a copy of the referendum exception application.

After the board adopted the preliminary budget, Frank asked whether or not it planned to apply to either PDE or the county court for each of the referendum exceptions.

Scherer said that the wording of the advertisement has to include both.

Part-time interim acting business manager Donna Les told the board at a Budget and Finance Committee meeting last week that next year's spending plan had to be reworked in order to avoid an additional 2.72-mill increase on top of a 3.56-mill, or 8.15 percent, increase in the 2011-12 preliminary budget the board agreed to advertise for adoption at last month's meeting. That decision came on the heels of a budget workshop agenda with budget process basics presented by Les before that month's regular meeting.

Otherwise, that would have increased the millage rate from 43.64 to 47.20 mills, which would have meant a person with a home valued at $100,000 and assessed at $50,000 would have paid $2,360, or about $180 more in property taxes next year.

Les told the board at that time that of the $1.7 million the district had in its fund balance, only $730,000 remains after the other $923,000 was used to balance the current year's budget.

The amount of money the district budgeted for its share of the 2011-12 Carbon Career & Technical Institute budget was understated by about $351,060, Les said at that time. Also, the loss of $426,051 in federal program money would have required an additional 2.72-mill increase in the district's 2011-12 preliminary budget, she said.

Les said revisions to next year's preliminary budget increased expenditures $555,498, from $26.8 million to $27.3 million, which represents a 1.95-mill increase over the initial preliminary budget.

Superintendent Carol Boyce acknowledged at that time that a reconciliation of billing showed that the district has "been significantly underbudgeting for the last several years." Les said the reconciliation was completed in November.

However, Les cautioned that the preliminary budget is only a rough draft, and therefore could be modified between now and final adoption due by June 30.

Boyce said at that time she and Les "will be talking with every building administrator" in an effort to re-evaluate their respective spending plans.

In December, the committee met with each of the district's department heads as part of a pair of meetings in its attempt to craft next year's spending plan.

This year, homeowners saw a 3.9 percent, or 1.64-mill increase, in their property tax rates after the board in June approved the 2010-11 budget on a 5-4 vote that raised the millage rate from 42 to 43.64 mills.

That meant a person with a home valued at $100,000, which was assessed at $50,000, paid $2,182 in property taxes to the district, $82 more than the $2,100 rate they paid in 2009-10 when the board passed a budget with a 2.44 percent, or 1 mill, increase that resulted in a $50 increase for residents with the same home value.