In a last-minute change of direction, Palmerton Area School District’s board of directors decided to hold the line on property taxes for the 2018-19 school year on Tuesday night.

A month after the board approved a preliminary budget containing a half-mill tax increase, only two board members, Kathy Fallow and Kate Baumgardt voted for the increase again Tuesday.

Shortly after that motion failed, the board voted unanimously to keep taxes level.

The increase would have cost a property owner with an average property assessment of $45,000 an extra $21, and generated $144,000 in revenue for the district.

“I believe the majority of the board felt that the district’s fund balance could absorb the proposed deficit without causing harm to the district’s overall financial stability,” board President Barry Scherer said of the vote. “Several board members had already expressed their opposition to the increase when the preliminary budget was passed last month.”

One of them was director Charles Gildner, who voted no on the preliminary budget, which included the half-mill increase.

“We’re projecting a $1.9 million deficit,” he said during a budget workshop. “I just don’t think an extra $144,000 on the backs of our taxpayers is going to put a huge dent in that.”

Tuesday’s vote came after comments from Bruce Reiner, an accountant and Towamensing Township’s tax collector, who called for a re-examination of expenses.

“It’s time for the district to be run like a business,” Reiner said. “You have to say here is the projected revenue, now let’s make the expenses work based on that. You’re not being good stewards of the taxpayers if the only answer is to always raise taxes.”

Asked last month what contributed to the need for a tax increase, business manager Ryan Kish cited an increase in salaries and pension, two years of retroactive payments to teachers after the settling of a contract totaling $810,000, and a proposed plan to add two districtwide police officers.

Kish had projected a nearly $2 million budget deficit, with the majority being made up by use of the fund balance.

“You knew some type of settlement was coming with the teachers,” Reiner said on Tuesday. “Why wasn’t something set aside for that? It’s also not unreasonable to ask your departments to review their budgets in an effort to minimize that deficit.”

The homestead/farmstead tax exclusion was approved at $207.38 for 2018-19.

Other financial items

The board on Tuesday also approved a 24 percent increase per member in stop loss coverage for the 2018-19 fiscal year through Great Midwest Insurance Company. The per employee per month charge will be $165.45 with a maximum per employee deductible set at $125,000.

“This is the self-funded health insurance plan to prevent against catastrophic claims,” Kish said. “One or two claimants had really high claims, which contributed to the increase. We received four quotes and this was the lowest for suitable coverage for us.”

Axis Insurance Company will provide athletic insurance coverage through Aug. 5, 2019, at a cost of $35,706 with primary excess coverage over $100 after board approval Tuesday. Axis will also provide voluntary student accident coverage for a 24-hour wrap around rate of $75 with benefits excluding all sports.

CM Regent will provide workers’ compensation coverage in 2018-19 at an estimated cost of $124,258.