The Northampton Area School District Board of Education has approved the 2016-17 final general fund, athletic fund and food services fund budget.

By a 6-1 vote, school directors approved a general fund of $98,900,985, athletic fund of $196,047 and food services fund of $2,364,686.

The general fund budget is supported by a tax increase of 2.48 percent that equates to 1.24 mills. The millage increases from 50 mills to 51.24 mills.

Based on the NASD average $57,000 assessment, the 2.48-percent tax hike increases the average property tax bill $71.76 annually, $5.98 monthly and $1.38 weekly.

The board vote included approval of the Act 511 Local Tax Enabling Act, setting a per capita tax of $5, real estate transfer tax of 0.5 percent and earned income tax of 0.7 percent, and approval of Section 670 Pennsylvania School Code, which sets the per capita tax of $5 and the real estate tax of 51.24 mills.

Voting to approve the budget were school Directors Dr. Michael Baird, Chuck Longacre, Robert Mentzell, Judy Odenwelder, board Vice President Chuck Frantz and board President David Gogel.

Voting against the budget approval was school Director Roy Maranki.

Absent were school Directors James Chuss and Jennifer Miller.

Making the motion to bring the budget to a vote was Baird, seconded by Mentzell.

“Keep in mind where we were in January compared to where we are now,” said NASD Superintendent of Schools Joseph A. Kovalchik.

The NASD administration has been working on the 2016-17 budget since the Dec. 21, 2015, school board meeting when Kovalchik and NASD Business Administrator Terry Leh presented the budget. The school board voted 8-0, with one director absent, to approve the 2016-17 preliminary budget at the Jan. 11 meeting.

Kovalchik and Leh noted that the tax hike, which started at 5.24 percent at the Jan. 11 meeting, was reduced to 2.48 percent at the May 23 meeting, for a reduction of 2.76 percent.

The dollar amount of the tax hike was reduced from $2,802,989 at the January meeting to $1,327,365 at the May meeting for a reduction of $1,475,624.

Use of the district fund balance was reduced from $4,293,354 in January to $3,604,294 in May, for a reduction of $689,060.

“That’s because of a lot of due diligence on the part of the board and administration,” Kovalchik said of the reductions, adding, “And there’s going to be some pain in that.

“We think we have class sizes that are manageable. And we think the facilities are manageable,” said Kovalchik.

The tax hike percentage was reduced from a 2.8-percent tax hike approved by the board at the May 9 meeting.

At the June 13 meeting, Longacre spoke about backing the 2.8-percent hike, even though he relented and voted for the 2.48-percent hike.

Longacre noted that the 2.8-percent hike is under the state-mandated index of a 2.9-percent maximum annual tax hike for NASD.

“I am not sure why we’re cutting it back. I have concerns with staffing,” Longacre said.

Kovalchik and Leh achieved the 2.48-percent tax hike by utilizing $172,000 of a $390,000 increase in Pennsylvania Department of Education general education and special education funding for the 2015-16 NASD budget.

The remaining $215,000 of the PDE increase was placed in the NASD contingency fund, bringing the fund to $468,000.

“The contingency is the highest we’ve ever had it,” Kovalchik said.

There’s a need for the contingency fund amount, said Kovalchik. Immediate concerns are a possible increase in the number of kindergarten and special education students this fall for the 2016-17 school year. The district should know by the end of July about kindergarten enrollment. Special education student needs usually are determined by the end of October. Either could require hiring additional teachers.

Kovalchik said he and Leh knew the 2016-17 budget would be a challenge. He said NASD should be better positioned fiscally for the 2017-18 budget because of the easing of funding requirements for the Public School Employees’ Retirement System and the winding down of the $80.6 million Northampton Area Middle School and Secondary Campus Renovation Project. Concluding project phases this summer include installation of curbing, sidewalk and the bus loop at the now completed auxiliary field (site of the old middle school), completion of the softball field on the west side of Laubach Avenue, a new Northampton Area High School marquee along Laubach Avenue and a new entrance to Al Erdosy Memorial Stadium, which includes a new ticket booth, paver area (with memorial bricks) and student memorial area.

Kovalchik said the district’s finances should also improve in the next few years with the influx of anticipated tax revenue from the FedEx Ground distribution center in Allen Township.

Leh outlined the recently approved basic education funding formula for the state’s 500 school districts.

The General Assembly passed HB1552. The Senate voted 49-1 for the bill May 18. The House voted 188-3 for the bill May 25. Gov. Tom Wolf signed HB 1552, aka Act 35, into law June 2.

The NASD impact is uncertain.

“In essence, we’re back where we started. In fact, it could be worse,” Kovalchik said.

Leh said there are still variables at the state level for the 2016-17 NASD budget, primarily $600,000 in PDE PlanCon reimbursements for district school construction. A state-level meeting May 24 about the matter didn’t take place, Leh said.

“My understanding is that it will be paid. They have authorized us to book it,” Leh said, referring to including the reimbursement in the 2017 budget. “We are going to book that revenue. So, you will not have to dip into the fund balance.”

“We’ve seen every scenario,” said Gogel of this year’s district budget approval process.

“I’ve been sitting in a chair like this for 16, 17 years, and I never saw anything like this,” said Baird, noting his years as a school director in NASD and other districts.

“Neither have I,” Leh agreed.