A proposed Northampton Area School District 2016-17 general fund budget of $98,544,880 was approved by the NASD Board of Education by a vote of 8-0, with one school director absent, at the May 9 meeting.

The proposed budget is more than $2 million less than the 2016-17 preliminary budget of $100,585,376 approved at the Jan. 11 board meeting.

The proposed budget calls for a 2.8-percent tax hike.

That could change.

The NASD administration learned the district is to receive a $390,000 increase in general education and special education funding for the district’s 2015-16 budget from the Pennsylvania Department of Education (PDE).

If the state increase is applied to the tax hike, it could reduce the hike to about 2 percent.

NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Terry Leh said they’ll present the board with options for use of the state increase at the next board meeting, 6:30 p.m. May 23 in the meeting room of the NASD Administration Building, 2014 Laubach Ave.

A 2.8-percent hike increases the tax for the typical NASD property owner by $81.02 annually.

A 2-percent hike increases the tax for the typical NASD property owner by $57.87 annually.

“This is a living document,” Kovalchik said of the proposed budget. “This doesn’t mean that [the tax hike] will be 2.8 percent. It could be higher. It could be lower.”

The annual tax hike dollar figures are based on the NASD average property assessment of $57,000. The average assessment represents 60 percent of NASD properties, according to the administration.

When asked by a reporter for Northampton Press after the May 9 meeting whether he’s happy with the PDE increase, Kovalchik said, “It’s nice. But Harrisburg still hasn’t met its obligations.”

The school board vote authorized the administration to advertise and make the proposed budget available for public inspection.

A vote on the final budget is expected at the 6:30 p.m. June 13 meeting. Pennsylvania requires school boards to approve their budgets by June 30.

The NASD board vote also approved the athletic fund of $196,047 and the food services budget of $2,364,686.

Kovalchik and Leh said they had not included an increase in state funding in the budget. They said they looked at PDE spreadsheets to determine the state funds increase.

Kovalchik said the state funds increase of $390,000 could be applied to the district fund balance. The unassigned fund balance at the end of the 2015-16 fiscal year is expected to be $5.3 million.

Or, Kovalchik said, the funds increase could restore the 2016-17 budget cuts, among them:

• Adding to the contingency fund, reduced to $250,000 in the budget;

• Restoring professional staff because of retirements. Only four of 17 positions are being replaced;

• Restoring capital maintenance cuts; and

• Replacing district vans, which are 10 years old.

Kovalchik also said a portion of the $390,000 could be used to reduce the tax hike, add to the fund balance or restore budget cuts.

“At the next board meeting (May 23), we’ll have some options for you to consider,” Kovalchik said to school directors.

Kovalchik and Leh were to meet the NASD administrative team May 10 to discuss options.

“We’ll have to make some decisions,” Kovalchik said.

The status of PDE Plan Con (school buildings renovation and new construction) reimbursement is still uncertain even after Kovalchik, Leh and school Director Chuck Long- acre participated in a May 9 webinar on the topic.

NASD is owed the PDE Plan Con 2015-16 reimbursement of $927,037 for George Wolf Elementary School, Bath, and Col. John Siegfried Elementary School, Northampton, expansion and renovations projects.

“We know we’re going to get the money. The question is when,” Leh said.

Leh stated the reimbursement timeline is complicated because Commonwealth Financing Authority next meets May 25.

According to the webinar, Leh said, three “buckets” of funding are in the offing:

1. For projects with funding in the pipeline (the Wolf and Siegfried projects, for example);

2. For projects with Plan Con G through H approval (for which the Northampton Area Middle School and Secondary Campus Renovation Project qualifies); and

3. New projects.

Leh said if the Plan Con reimbursement is received by Aug. 31, it can be applied to the 2015-16 budget. If approved after that, it would be applied to the 2016-17 budget.

“You’re going to see your fund balance down by about $1 million,” Leh warned if the Plan Con funds are not received by Aug. 31.

“I want to receive it by Aug. 30 because I want it in the budget,” Leh said.

PDE Plan Con reimbursement for the middle school project is expected by the end of the 2016-17 school year, Leh said.

Commonwealth Financing Authority last met in September 2015, according to Leh.

At the May 9 meeting, school directors did not discuss or state their preferences concerning use of the state funds increase.

In a straw vote at the April 18 meeting, five of the nine-member school board favored a 2.8-percent tax hike for the 2016-17 district budget, two favored a 3.5-percent hike, one favored a 2-percent hike and one favored a 0-percent hike.

Favoring the 2.8-percent hike were school board Vice President Chuck Frantz and school Directors Judy Odenwelder, Dr. Michael Baird, James Chuss and Jennifer Miller. The NASD administration favors this option.

Favoring the 3.5-percent tax hike were school Directors Robert Mentzell and Chuck Longacre.

Favoring the 2-percent tax hike was school board President David Gogel.

Favoring the 0-percent tax hike was school Director Roy Maranki.

The 2.8-percent hike is under the state-mandated 2.9 index, although NASD received 2016-17 budget exceptions from the PDE for a tax hike percentage higher than the index.