A miscalculation of the real estate market value of Northampton County is causing a momentary hiccup in the district budget approval process, reported directors at the finance committee meeting April 10.

School districts use real estate market values to determine tax rates for the current year, which impacts district budget calculations, explained Bethlehem Area School District Chief Financial Officer Stacy Gober. The State Tax Equalization Board (STEB) is responsible for determining the aggregate market value of taxable real estate property across Pennsylvania.

This year, STEB determined the market value of Northampton County properties within BASD to be over $345 million less than last year. This unforeseen drop in value resulted when STEB, in error, removed certain land parcels belonging to Sands BethWorks that are normally included in the assessment.

“This would clearly address the large reduction in market value for Northampton County,” Gober said.

School districts that lie in more than one county, as BASD lies in both Northampton and Lehigh counties, have a particular challenge calculating tax rates, Gober explained. State guidelines dictate that school districts in more than one county will adjust the taxation rates so the tax burden is proportionately balanced between the two counties to account for fluctuating property values.

A drop in value in Northampton County, therefore, results in that large percentage of the district tax burden being shifted to Lehigh County to balance the scales, resulting in a higher adjusted millage rate for Lehigh County.

“These market values will impact that shift between the two counties and we have to make sure that it is fair and equitable and following the same trend that we would normally expect,” said Gober.

Gober said STEB is currently in Northampton County evaluating the error. After this, the STEB board will need to approve the corrected millage rate for Northampton County before BASD can use it to calculate their budget. This puts the district in a bit of a time crunch as tentative adoption of the budget is scheduled for May 15 and the STEB board does not meet until May 30, said Superintendent Dr. Joseph Roy.

The district will continue working with STEB, but is also calling in help from local legislators to make sure STEB finishes their process in time for the district to approve their tentative budget May 15.

“Right now, it’s a big question mark right in the middle of our process,” Roy said.

The last budget workshop is scheduled for April 26, followed by the tentative budget adoption on May 15 and the final budget adoption on June 19.