An early Palmerton Area School District budget proposal includes a 3.4 percent property tax increase for the 2017-18 fiscal year.

Palmerton Business Manager Ryan Kish said despite the outlook, a lot of variables including unknown state funding amounts, insurance estimates and potential line item changes could give the budget a slightly different look before its final adoption later this year."Right now we're looking at a deficit slightly above $2 million," Kish said Tuesday night. "We'll go back to the drawing board and see where we can get things down. We're confident we can get it down a little."A 1.88-mill tax increase would bring in an additional $540,000 in revenue. Homeowners with an average property assessment would see an increase of $80.84 in property taxes.If the fund balance offsets the $2 million deficit, the district would be left with $3.38 million in that category.The proposed budget, which includes no increase in state funding, features a 1.8 percent increase in revenues and a 3.6 percent rise in expenditures from last year."We looked at districts of similar size with similar demographics and we're finding that the similarities are there in Carbon County and surrounding counties," Superintendent Scot Engler said.Salaries are set to rise $963,066 in 2017-18 while nondiscretionary spending would increase by $106,459 and discretionary spending would jump $73,546.Kish said he based salary estimates on previous contracts. If a new teachers contract is inked before the budget adoption, that figure could go up or down.Supplies and staff additions for an all-day kindergarten program are included in budget projections.Discretionary spending also includes the addition of a volleyball program at $15,000.Electric costs are projected to rise $67,000 due to the addition of air conditioning in district buildings.The district's contribution to the Pennsylvania State Employees' Retirement System will stand at 32.57 percent of salaries.After a successful appeal, Horsehead Corporation will receive a $70,000 tax credit.While it is finished borrowing for capital projects, the district has five years to use that money and board member Sue Debski would like to see Palmerton hold off on two planned upgrades."I'd like to see us put off the artificial turf field at the stadium and the all-weather track project," Debski said. "We are in a position where we don't know what is happening with a possible property tax elimination and this way we could keep that $2 million in the fund balance. Even if it costs more later for the field and track, I think playing it safe right now is the way to go."Kish said if state legislators pass a property tax elimination bill, the look of the budget would be drastically different."There are more questions than answers on that right now," Kish said. "The thing about having a healthy fund balance is that we can mitigate some of that first-year cost if property taxes are eliminated and go from there."