In a seven-to-one vote May 15, Bethlehem Area School District directors passed the proposed final 2017-18 budget that includes one of the lowest tax increases in the district’s history, as well as some painful cuts to programming and staff positions.

The total budget of $271.8 million represents an overall 4.24 percent increase from the 2016-17 budget of $260.7 million, with primary cost drivers being salaries at $1.66 million, retirement contributions at $3.15 million and special initiatives focused around literacy at over $2 million.

Superintendent Dr. Joseph Roy noted that in the absence of rising mandated pension costs and charter school costs, the net operating costs of the district increase by only 3.47 percent, following a 2.98 percent increase in 2016-17 and a 1.69 percent increase in 2015-16. Those net operating costs include salaries, health benefits, transportation, facilities, educational programming and extracurricular activities. The district will pay $26.7 million in charter tuition expenses and $33.2 million in pension costs this year.

“We’ve done a good job controlling our internal expenditures,” Roy said. “It’s charters and pension growth that are creating the biggest problems for us,” including the need for a small but painful tax hike.

Residents of Northampton County will see a tax increase of 1.19 mills and 0.4945 mills for Lehigh County residents, reflecting an average 2.31 percent increase district-wide, or an additional $72 yearly for the median property. The administration worked the increase down to 2.31 percent from an initial 2.95 percent, noting all along that without rising charter and pension expenses, no tax increase would have been necessary at all over the past five years.

However, it doesn’t stop there for Lehigh County residents because of changes in the real estate market value in Northampton County.

State law dictates that the millage rates for school districts lying in more than one county, as BASD is in both Northampton and Lehigh counties, will be adjusted so the tax burden is shared proportionally by each county to account for fluctuating property values. This year, Northampton County was assessed by the State Tax Equalization Board (STEB) at a lower market value than previous years, resulting in an additional 3.57 percent tax increase in Lehigh County this year to rebalance the scales.

“This is not due to any actions on the part of the school district,” Roy noted, “but we’re cognizant of the fact that because of the rebalancing Lehigh County is going to take a bigger hit than usual this year because STEB chose to do things a little differently this ear. So, we worked very hard to come down from 2.95 percent to 2.31 percent.”

The tax increase will in part help to alleviate the remainder of the $12.5 million deficit facing the district, which the administration was forced to bring down with difficult cuts to programming and several teaching, teacher aide and guidance counselor positions through attrition, as well as social workers contracted to the district.

Programs being partially or completely shelved for now include the Elementary Spanish Program, band uniform and musical instrument purchases, afterschool and summer programming, Excellence Through Equity Initiatives, technology and materials updates and professional development for teachers.

Programs remaining on pace include Reading by Grade 3 (RBG3), First in Math, Project Lead the Way, Collective Impact Efforts comprising community schools and local partnerships, high school computer science programming, and efforts toward blended, personalized instruction for students.

Director Dr. Dean Donaher expressed concern over the possibility of repeated yearly tax increases if nothing is done at the state level on behalf of public education. Board President Michael Faccinetto said Pennsylvania ranks 46th nationwide for education funding, but the average student cost is in the top 10. Support from the local community keeps that number from going any higher, he said.

“Kids get the education they need because taxpayers pick up the local tab year after year,” Faccinetto said.

Donaher said he asks only for a fair playing field where charter reform is concerned, for instance, mandating that school districts do not have to reimburse charter expenses for service that they offer themselves, such as Cyber School.

“We are happy to bring you a budget that we think moves us ahead next year,” Roy said. “There’s more we would have liked to have done. There are things in here that are going to hurt us, but we do have a $72 per year tax increase in order to support it and we think it’s as good as we can get.”

Faccinetto went on to call the small, but painful tax increase “responsible. It’s going to hurt, but I think it’s what we can do at the time and still preserve some of the core programs of the district.”

Final adoption of the budget will take place June 19.