The Palmerton Area School District administration unveiled its $31.6 million proposed budget for the 2016-2017 school year at Tuesday night's school board meeting.

According to the proposed budget, the school district anticipates collecting $18.4 million through local taxes via a 1.72 mill increase.Ryan Kish, the school district's business manager, said the increase translates into an additional $74.04 in taxes on residential properties that have an average assessment of $43,000. Most properties in the district fall into that category, he said. For homes with a $50,000 taxable assessment, the increase would be $86.09.The problem facing the school district is a $1.3 million gap between its anticipated $29.9 million in revenue, and its expenditures. The largest expenditure is salaries, followed by benefits - mainly for health care. Depending on how much the school district gets from the state, the difference could be better or worse than expected."We're getting money, we just don't know how much or when we'll get it," said Ryan Kish."This is the same scenario playing out across the state," said Superintendent Scot Engler. Some school districts are far worse off than Palmerton. Some districts are looking to reduce staff, change jobs from full-time to part-time positions, or borrow several million dollars to make ends meet, he said.The proposed budget showed that the school district transferred over $3 million from the fund balance to the Capital Reserve Fund in 2014-2015 school year, and planned to transfer another $3 million in 2015-2016. The $6 million was part of the contribution for the various construction projects. That second transfer hasn't taken place yet.The school district took a wait-and-see stance in case it needed the funds elsewhere, since the state budget wasn't passed, Kish said. Now that it has passed, the school board discussed if the entire $3 million should be transferred over. No amount was designated in the 2016-2017 budget to be transferred."We expect to dip into the fund balance," Kish said.The district expects the state to have similar problems in passing its 2016-2017 budget. For the purpose of creating a proposed budget, Kish anticipates about $11 million from the state, which is actually down about $73,000.School board member Sue Debski asked if the fund balance has to remain at a certain level and how it would affect the district's credit rating.Engler said it won't affect the credit rating, because construction projects are viewed as a positive development."We don't want to dwindle it down too much," he said.The federal contribution was listed as $492,275. It is down by $50,000, because that amount has been discontinued and should have been taken out of the budget several years ago."It's a budget assumption of something we would get, but never did," he said about the federal contribution.School board member Barry Scherer asked Kish, "Do you think we will get what you have budgeted?"Kish replied, "I do not believe we will get the full amount."The numbers keep changing from on a daily basis, Engler said. That's why they can't give the school board exact figures. The amounts could be off by $100,000 or $500,000 or some other figure, but they are in the range of what the district should receive. He told the school board that creating the budget is "the most important of task." But knowing how much money is coming from the state is like trying to build a house only to "find out you aren't getting paid and when you finally do, it's less than you expected."Kish said he thinks it's possible the school district could receive additional 2015-2016 funding next year, as well as the 2016-2017 funding.In good news, the school district did manage to cut expenditures by $63,000, while still look to replacing a kiln at the junior high school, offer co-ed track, and purchase a second Gator utility vehicle at the high school. The expenditures were reduced through the bond refinancing last year.Several school board members thought $20,000 for a Gator was too much. Joe Faenza, director of district facilities, said the number was for an upgraded model based on a dealer's price."I can get you a good hard state contract number," he told the board."I would like one with just the basics," said Charles Gildner, school board member.Kish also told the board that the big jumps in district provided funding toward the Pennsylvania State Employee Retirement System, which provides retirement funding for school employees, is nearly over. From 2011 to 2017, school districts statewide saw their contribution to PSERS jump from 5 percent to 30 percent. The contribution level is expected to level out in 2019 at near 33 percent.