Palmerton Area School Board directors unanimously voted Wednesday to adopt a proposed final budget of $43.76 million for the 2026-27 school year, built at the maximum allowable tax increase under state law.

The proposed budget carries a 3.098-mill increase, equivalent to the full 4.7% Act 1 index, which would bring the district’s real estate tax rate to 69.013 mills if approved next month. Under Act 1, districts cannot exceed the index without a voter referendum. Wednesday’s vote, officials said, makes the budget available for public inspection beginning Thursday and satisfies the state’s required timeline for budget adoption.

“This does not mean that taxes will be raised to that amount; that will be decided at our June meeting,” Assistant Superintendent Ryan Kish said regarding the vote.

The budget’s major cost drivers were laid out at the board’s May 5 workshop: a 23% spike in medical insurance costs adding more than $1 million; charter school spending reaching $2.47 million, up $147,000 from the prior year; special education outplacements and intermediate unit services rising $431,000; and new construction-related debt adding $305,991. Staffing accounts for 64% of total spending at $28,035,671. Even at the maximum index increase, generating an estimated $923,000 in new revenue, the budget still carries a projected deficit of more than $1.7 million that must be drawn from fund balance, according to Kish.

Before the vote, director Erin Snyder asked administration about the relentless rise in special education outplacement costs.

“Why is our outplacement so much higher than it previously was in the years before, because every year outplacement keeps going up and up and up,” Snyder said. “Are we out placing more students now than we have previously?”

Administration indicated the number of students being outplaced has not increased significantly; the cost of the programs themselves has.

Kish said the issue resonated after attending a statewide advocacy event.

“A lot of school districts were pointing out how high their special education costs have gone, so it is almost statewide,” he said. “I think we have ideas on what we can do, but we’re not ready to share them.”

The board will hold its final budget vote, which will lock in the tax rate, at its June 16 meeting.