Palmerton Area School District’s board of directors is leaning toward not raising property taxes for 2025-26 as the June 30 deadline for final budget adoption approaches.

With expenditures projected at $41.8 million and revenues at $41.3 million, the district is looking at a shortfall of $558,000. However, that figure does not include potential additional funding from the state.

“The governor did propose in his budget $496,000 additional dollars for Palmerton,” Assistant Superintendent of Finance and Facilities Ryan Kish said. “So if that goes through, we would only have a difference of $61,000.”

The board weighed options for closing the gap, including whether to implement a property tax increase.

“I’m not in favor of an increase this year,” director Erin Snyder said. “Palmerton Borough had a big hike this year. I think we need to take things like that into consideration.”

Fellow board member Sherry Haas said she would support keeping the district’s property tax rate level, but cautioned how those decisions impacted fiscal planning in the past.

“When we did that previously we then had to take a bigger jump in the following years,” Haas said. “I’d rather take a baby step now than a 6-foot jump in the future.”

According to the presentation, 64% of the district’s budget is dedicated to staffing salaries and benefits. Tuition and outplacements, including payments to charter schools, cyber schools and outplaced students, comprise 17% of the budget. Departmental expenses account for 6%, debt service is 5%, transportation 3%, and infrastructure, including facilities and insurance, is also 3%. The remaining expenses cover miscellaneous costs such as legal fees, security and food service.

Kish noted several budget updates since the last meeting.

“We added a rental for the district administrative offices since we last met and a new security guard, which is already servicing the high school,” he said. “We also did an administrative restructuring at the last meeting, which saved us $88,000.”

On the revenue side, minor changes were seen in assessments, increases in state subsidies, and new charter school transition funds.

“Increases in basic education funding, special education funding and our regular block grant almost doubling,” Kish noted, contributed to these updates.

The district emphasized that its major cost drivers remain pension contributions, medical insurance costs and charter school expenses.

“Medical again, that’s the big one at 16%,” Kish said regarding insurance increases. “This is all based on our actual usage, and it varies year to year, but the projections are not good for next year.”

The issue of charter school costs, especially cyber charter schools, is drawing significant attention in Palmerton as it is across the state.

Reading from prepared slides, Kish said, “The state sets charter school tuition rates for each district that are based on the cost of educating students in their home school district buildings.”

For the 2024-25 school year, cyber charter tuition for regular education students ranges from $7,659 to $28,000 per student, while special education tuition ranges from $18,626 to $93,000.

“Cyber charter schools do not need to employ security or maintenance custodial staff, heat, cool or maintain school district facilities and grounds,” Kish said. “Yet they are funded as though the costs are the same.”

The district presented examples of cyber charter school spending, claiming taxpayer funds were used on items such as “dining, wineries and breweries, and professional sports tickets.”

Specific spending included $903,000 in advertising by Agora, $2.4 million in fuel stipends by Commonwealth Charter Academy and $694,000 in Google advertising by Achievement House.

The district estimated that simply adjusting the tuition rate for regular cyber education students to $8,000 would save Palmerton approximately $700,000.

“For the 25-26 school year, we’re estimated to spend $2.3 million on charter schools, with the majority being spent on the cyber charters,” Kish said. “That $2.3 million equals about 24 classroom teachers for us.”

Debt service was another area of discussion on Tuesday.

The total district debt service, Kish said, is $2.1 million, plus an additional $236,000 for the district’s portion of Carbon Career & Technical Institute debt, bringing the total to $2.3 million. No increase in debt service is planned for 2025-26, but the district expects to incur new debt in the following year as part of construction projects that include new administrative offices and an addition at the high school aimed at creating a more secure entrance and creating more classroom space.

“In 2025-26 we’re going to use our reserves for those project costs,” Kish said. “In 2026-27, we will have a budgetary impact of about $414,000. The tax impact on that would be about 1.29 mills, which for the average taxpayer is a $58.05 increase.”

Similar figures were projected for 2027-28.

Palmerton is expected to vote on a proposed final budget in May, followed by a final budget in June.