It took four tries, but Northern Lehigh School District settled on a 5% budget increase for the 2023-2024 school year.

School directors cautioned residents likely won’t realize that large of a property tax increase.

On a 6-1 measure, the school board on Monday adopted the proposed final budget of $38,461,590 for 2023-2024. Board President Mathias Green was opposed. Directors Rhonda Frantz and Chad Christman were absent.

That calls for a millage rate of 25.2259 in Lehigh County, and a millage rate of 72.8524 in Northampton County.

Sherri Molitoris, director of business affairs, business & human resources officer, said the current budget has a 5.5% Act 1 tax increase in it, which would be additional revenues for the district of $855,000.

Middle school

Superintendent Matthew J. Link said that probably within the next three years, the district is going to have to make some decisions about Northern Lehigh Middle School.

Link said potential options include transition sixth grade to the middle school; renovate interior and exterior; renovate interior and exterior with addition; or new construction.

“We cannot do any movement on these decisions really within the next three years, and that’s based on our most recent Moody’s bond rating call, and we can’t take on any large additional debt for the next three years,” Link said. “Right now, that’s one of the reasons why our bond rating has actually improved; it was good to start with, and it actually went up to the next level, and that is because of how we are timing our major projects.”

Expenses

Molitoris said cost drivers include salaries (currently in negotiations with the district’s professional staff); medical costs have increased by 12.5%; social security; Lehigh Career and Technical Institute increase of $100,000; Carbon Lehigh Intermediate Unit increase of $500,000, charter school increase of $200,000; and outplacements of students increase of $150,000.

She said cost reductions include retirement/PSERS (decreased from 35.26% to 34%).

Molitoris said expenses are $38,461,000 while revenues are $37,923,000.

“In that is also a fund balance to offset using the health care at the 12.5% increase, so we have money set aside in our fund balance to offset those increases,” Molitoris said. “So this budget has built in it that we use almost $295,000 to offset those costs for our health care increases.”

With that, Molitoris said the district is still at a budget shortfall of $1,437,000.

As for the district’s estimated fund balance at the end of June 30, 2023, she said the district is anticipating using about $300,000 out of fund balance, and should have somewhere around $14.3 million at the end of the year.

Molitoris said if the district would use everything out of assigned fund balance, it would need $1,732,000 to balance the budget, $294,000 is medical and health care increase, and $1.43 million is what the district is currently short.

She said expenses are $38,461,000 revenues are $36,729, 000 which leaves a $1,732,000 budget shortfall, of that $1,732,000 estimating using that $294,000 out of that health care committed fund balance in order to offset those increases, which means it’s at an additional budget shortfall of $1,437,812.

Molitoris said if the district would take all of it out of fund balance and not do any kind of a tax increase, it would bring its fund balance at end of the 2023-2024 school year to $12.6 million.

With that with a 5% increase, the district would see an additional $767,021 in additional tax revenue.

Lehigh County residents would pay $172 more, and Northampton County residents would pay an additional $186 more.

Multiple votes

Initially, Director Gary Fedorcha made a motion for a 4% increase.

Despite a 4-3 vote, the motion didn’t pass because there was not a majority of the board.

Joining him in favor were directors Robin Distler, Natalie Snyder and Kulp. Opposed were directors Gale Husack, Robert Kern, and Green.

Next, a motion made by Kern for a 5.5% increase failed on a 5-2 vote, with only Kern and Husack in favor.

Afterward, Fedorcha made a motion for a 4.5% increase, which once again despite a 4-3 vote, didn’t pass because there was not a majority of the board.

Kulp then made the motion for a 5% increase.

Before the vote, Fedorcha cautioned the public not to get frightened of the initial figure, and that whatever the board does now is preliminary.

“We can always come down,” Fedorcha said. “So when you see the final budget, it will probably be a lot less than what we’re putting out possibly today.”

“We do understand things are tight these days, everything’s going up, school costs have also gone up,“ Kulp said. “But, we will do our best to keep things in line the best we can.”

Green said, “I guess I’m getting really sick and darn tired of sitting here year in and year out scratching our nails trying to come up with a couple of bucks to make this balanced and yet our people in Harrisburg aren’t doing anything for us. The governor, our senator, come on guys, what are you doing for Northern Lehigh, you’re doing nothing for us.

“We don’t have any warehouses that are sending us a million dollars a year, we don’t have any Whitehall Malls, or Lehigh Valley Malls, or Coscos and yet we’re still competing on those same shelves.”

Kern who voted against the increase, said, “Education’s become a competition, with the lack of folks going into the educational field,” Kern said. “Even though we don’t have the industry, infrastructure of other school districts in our area, I wish we did. We’re still competing to keep staff, effective staff in our district for our students.

Kern said the district has to prepare for when the COVID relief funds go away.

“And I just think knowing that if we really want to keep those positions in the future that we thought were very important to use our ESSER funds for, and we all knew that those moneys were going away and I don’t think we spent them in any disregard, I thought they were well spent dollars and I think those are positions that we think are vital (yet) to keep so we have to prepare for that in the future,” he said.

“As much as a tax increase hurts ... and believe me, we all pay taxes up here as well in our district, I just felt 4% kind of hamstrung us a little bit.”

Last June, the school board approved a 2.5% increase in the property tax rates.

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