A compromise has been reached in the proposed Northampton Area School District tax hike, with a majority of the board apparently favoring a 2.47 percent tax increase.

The NASD tax rate is 47.71 mills. Based on the district average assessment of $57,503.79, a property owner pays on average $2,743.50 annually.

Based on the district average assessment, with a 2.47 percent tax hike, the millage rate would increase 1.18 mills to 48.89 mills, or $2,811.36 annually, which is an increase of $67.85 annually, $5.65 monthly or $1.30 weekly.

The NASD administration is expected to place the 2014-15 budget, with a 2.47 percent increase, on the agenda for an up or down vote at the next school board meeting, 6:30 p.m. June 9, in the NASD administration building.

Based on an unofficial straw vote taken at the May 19 school board meeting, four, and possibly six, school board members favor the 2.47 increase, which is under the allowable state index of 2.5 for NASD.

The 2.47 percent increase is expected to be achieved by reducing the 2014-15 district budget contingency fund by $105,000, from $305,000 to $200,000.

No money will need to be taken from the NASD unassigned fund balance, allowing the balance to remain at 7.65 percent of total budget expenditures. The Pennsylvania Department of Education (PDE) recommends school districts maintain an unassigned fund balance of 5 - 8 percent.

Approximately $1.9 million of the unassigned fund balance will be used to balance the 2014-15 budget. That is less than the $2.6 million of the unassigned fund balance used to balance the 2013-14 budget.

"We're actually able to use less fund balance," NASD Business Administrator Terry Leh told school directors Monday night. "We plan to use less next year."

Superintendent Joseph Kovalchik and Leh have said using less of the unassigned fund balance has boosted and helped maintain NASD's exemplary Moody's Aa3 credit rating.

PFM, district financial advisor, has urged the district to maintain its fund balance.

PDE allows NASD an index of 2.5 percent for a tax hike. The district may raise taxes 2.5 percent, but no more without an exception.

The school board voted for the administration to apply for a PDE exception of up to $691,045, which it received.

Several factors were cited by some of the school directors in their rejection of the 2-percent increase proposed by school board President David Gogel at the May 5 meeting, and in their rejection of the 2.34-percent increase proposed by Gogel at the May 19 meeting.

"I think in the spirit of compromise, we can split the difference," Gogel said Monday night in offering his 2.34-percent tax hike proposal.

"We're basically saving the taxpayer 20 cents a week," board Vice President Jennifer Miller responded,

"We don't pay taxes per week," Gogel responded.

"We're wasting our administration's time," Miller said.

"My taxes will go up significantly. But I honestly believe it's for the greater good of the school district," Miller said.

Board member Judy Odenwelder noted that NASD has the second lowest school district millage rate in Northampton County. Pen Argyl Area School District has the county's lowest school taxes.

Also, Odenwelder noted that NASD has not had to furlough teachers and is managing an $80.7-million Northampton Area Middle School and Secondary Campus Renovation Project.

"I think we have a great team effort in moving the district forward," Odenwelder said.

A big unknown factor is how much PDE funding for school districts will be included in the Pennsylvania budget.

The NASD school board voted 5-4 at the May 5 meeting to approve the administration's 2014-15 proposed budget of $91,698,148 for the general fund; $2,381,657 for the food services fund and $173,569 for the athletic fund.

The general fund budget approved May 5 called for a 2.68 percent, or 1.28 mills, tax hike, which would have resulted in a 48.99 mill tax rate, or $2,817.11 annually, which is an increase of $73.60 annually, $6.13 monthly or $1.42 weekly.

In the straw poll taken at the May 19 meeting, favoring the 2.68 percent increase were Chuck Frantz and Chuck Longacre, who indicated they could support a 2.47 increase.

Favoring the 2.47 percent increase were board members Miller, Oldenwelder, Roy Maranki and Dr. Michael Baird.

Favoring the 2.34 percent increase were Gogel, Darin Arthofer and Jean Rundle.

A 2 percent hike, actually 1.99 percent, or 95 mills, hike, would have resulted in a 48.66 mill tax rate, or $2,848.13 annually, which is an increase of $54.63 yearly, $4.55 monthly and $1.05 weekly.

A 3.50 percent, or 1.67 mills, increase was in the proposed budget approved at the Jan. 27 board meeting.

One mill in NASD equals approximately $1,059,000.

School boards must approve district budgets by June 30 annually.