The Northampton Area School District 2019-20 preliminary general fund budget proposes a 3.79-percent tax increase that would increase the average property owner’s tax bill $121.27 annually.

The preliminary general fund budget has a deficit of $5,678,722.

Expenditures are $110,718,113, an increase of $3,714,808, or 3.47 percent, from 2018-19 expenditures of $107,003,305.

Revenues are $108,459,391, an increase of $1,456,086, or 1.36 percent, from 2018-19 revenues of $107,003,305.

To balance the budget, $3,420,000 would be used from the district’s unassigned fund balance, and millage would be increased 2.04 mills, from 53.83 mills to 55.87 mills.

Based on the 2018 average assessment of $59,444, the annual tax bill would increase from $3,199.87 to $3,321.14, or $121.27 annually, $10.11 monthly and $2.33 weekly.

The 2019-20 budget was unveiled by NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Terry A. Leh at the Jan. 14 board of education meeting. It is Leh’s last NASD budget before he retires this year.

“We are not going to finalize it at 3.79 percent,” Kovalchik said of the tax percentage increase during his and Leh’s 45-minute budget presentation to the NASD school board.

Kovalchik said the district is required to hire three special education instructors, one each at Northampton Area High School, Northampton Area Middle School and the elementary schools.

“We have to have it from a compliance standpoint,” Kovalchik said.

Also required is a high school guidance counselor.

A math teacher and possibly English and science teachers are needed at the high school.

Budget items contributing to higher expenditures, according to Kovalchik and Leh, are increases in Public School Employees’ Retirement System funding, $1,104,816; special education, $614,918; charter-cyber schools, $350,000; and Social Security, $124,055.

According to Kovalchik, “$2.8 million of the proposed increases the administration and board doesn’t have control over.”

The administration expects to ask the school board to approve the preliminary budget at the next school board meeting, 6:30 p.m. Jan. 28, in the administration building, 2014 Laubach Ave., Northampton.

The 82-page NASD 2019-20 preliminary general fund budget, 2019-20 athletic fund budget and 2019-20 food service budget is on the NASD website, nasdschools.org.

The budget can be read and printed out at nasdschools.org/site/handlers/filedownload.ashx?moduleinstanceid=11&dataid=9223&FileName=19-20 Preliminary Budget.pdf.

The index, or Pennsylvania Department of Education allowable percentage of tax increase for the 2019-20 NASD budget, is 2.8 percent. The NASD administration plans to ask the school board to approve an application to the PDE for an exception to exceed the index. The PDE has approved NASD exceptions in previous years. NASD has not, to date, implemented an exception.

The administration expects to receive an answer from PDE on its 2019-20 index exceptions application at the April 8 board meeting.

The budget timetable includes adoption of the final budget, May 6; advertising the final budget, May 31; and approval of the final budget, June 10. School district budgets are required by commonwealth law to be approved by June 30.

Last year, the NASD school board approved a property tax increase of 1.06 mills, or 2.01 percent, to help fund the 2018-19 general fund budget. When Kovalchik and Leh first presented the preliminary 2018-19 budget in January 2018, it had a 3.9-percent tax increase.

The 2018-20 preliminary general fund budget expenditure summary, with comparisons to the 2018-19 budget, is:

Instruction, $66,442,221, an increase of $2,689.727, or 4.22 percent

Support services, $32,594,648, an increase of $1,371,625, or 4.39 percent

Noninstructional services, $1,625,904, an increase of $99,805, 6.54 percent, and

Debt service-transfers, $10,055,340, a decrease of $446,349, or minus 4.25 percent

Salaries and benefits as a percentage of the 2018-19 preliminary general fund budget are $75,015,219, or 67.75 percent, which is $43,946,970 in salaries, or 39.69 percent, and $31,068,249, in benefits, or 28.06 percent.

Salaries and percentage of budgets include:

Professional, $32,321,452, or 29.19 percent

Custodial-maintenance, $3,894,060, or 3.52 percent

Administration, $3,455,807, or 3.12 percent

Secretarial-clerical, $2,525,556, or 2.28 percent, and

Instructional aides, $1,750,095, or 1.58 percent

The 2019-20 preliminary general fund budget revenue summary is:

Local, $71,286,968, an increase of $1,037,877, or 1.48 percent

State, $32,835,423, an increase of $742,918, or 2.31 percent

Federal, $902,000, an increase of $60,291, or 7.16 percent

Other, $15,000, a 100-percent increase

Committed fund balance, $0, a decrease of $400,000, or 100 percent

Unassigned fund balance, $3,420,000, with no change, or 0 percent

The fund balance review is:

Beginning fund balance, $10,585,070, a decrease of $2,820,000

Ending fund balance, $8,165,070, a decrease of $2,420,000

Committed-assigned fund balance includes:

Inventory, $295,000

Prepaid expenses, $155,000

Districtwide capital improvements, $500,000

Chromebook reserve, $80,000

Balance next-year budget, $1,500,000 and

Ending fund balance, unassigned, $5,635,070

An estimated $800,000 in tax revenue from the FedEx Ground hub in Allen Township is helping the district budget.

About $400,000 of the amount was applied to the 2018-19 budget for preliminary work on the Lehigh Elementary School project. (See related story on page A5.) The other $400,000 is included in the 2019-20 budget.

After the Jan. 14 meeting, Kovalchik said tax revenue from the FedEx Ground hub is aiding the school district budget and the increased revenue “from a commercial property standpoint, it’s the first time in a long time.”

He said the tax revenue will help reduce or hold the line on tax increases and reduce use of the district fund balance.