The proposed 2021-22 general fund budget for Northampton Area School District shows a significant reduction in a tax increase.

The tax increase would be 1.99 percent, down from 4.13 percent, with the average annual residential increase at $59, down from $123.

The deficit is reduced to $1,253,500, down from $2,607,383.

Fund balance use is decreased to $2,146,894, from $2,600,000.

Expenditures increased to $115,693,720, from $114,852,606.

Revenue increased to $114,440,220, from $112,245,223.

The difference is the injection of more than $2.5 million in federal funds from the Elementary & Secondary School Relief Fund.

NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Matthew Sawarynski presented the general fund budget update to seven school directors at the April 12 school board meeting in the cafeteria of Northampton Area Middle School.

Absent was Charles “Chuck” Longacre, whose resignation from the school board was accepted by a 7-0 vote. Longacre’s letter of resignation was dated April 1 and was effective on that date.

“I would like to thank Mr. Longacre for his years of service to Northampton Area School District,” Kovalchik said.

In an April 12 email to Northampton Press as a letter to the editor, Longacre stated: “For the past seven-plus years, I’ve had the privilege of representing Moore Township, Chapman and Bath boroughs on the Northampton Area School District school board.

“Unfortunately, my vision for the future of NASD is much different than that of the district, and I have decided to resign from the NASD board,” Longacre wrote.

“I wish to thank the citizens and voters of Moore Township, Chapman and Bath for the confidence you have placed in me as school director, and I wish the best for you and for NASD,” the letter concluded.

Kovalchik said NASD will advertise and place on the district website a request for applicants from Region 3 of the district seeking appointment to Longacre’s unexpired term, which ends Dec. 31. Longacre filed but later withdrew as a candidate in the May 18 primary election.

Federal funds have increased to $3,794,103 from $1,146,000 listed in the January budget presentation by Kovalchik and Sawarynski.

Not all of the $3,794,103 Elementary & Secondary School Relief Fund is being used in the 2021-22 budget. Instead, $2,648,103 is being used, with $1,146,000 being held for future use.

“We’re keeping some back in case we need it this fall or next year,” Kovalchik said.

The majority of the federal funds are for specific use relating to the impact of the COVID-19 pandemic on NASD.

Districts in the Lehigh Valley and across the United States are receiving Elementary & Secondary School Emergency Relief Fund (ESSER) revenue.

Other 2021-22 revenue remains the same from the figures announced in the January presentation compared to the April presentation, including $76,703,729 in local revenue and $31,780,494 in state revenue. The category of other revenue is $2,161,894, down from $2,615,000 in the January presentation.

The EIT, Transfer Tax and delinquent tax is assumed at 2020-21 amounts.

Earnings on investments is to decrease $500,000.

Basic education and special education subsidies are assumed to not increase.

The transportation subsidy is expected to decrease $400,000.

The property tax reduction allocation, known as homestead-farmstead, is assumed to provide no revenue, a $1.5 million reduction from 2020-21. There will be no impact on the budget. However, taxpayers will see an increase in the bill.

Warehouse-new housing revenue is projected at $1.4 million.

Reverse appeals estimated total revenue to date is $618,000.

Title funds are assumed at 2020-21 amounts.

ESSER revenue is divided into three categories, according to the 12-page PowerPoint presentation presented April 12:

• ESSER I: Coronavirus, Aid, Relief & Economic Security Act (CARES). The NASD allocation, $495,782 in spring 2020, was used for Chromebooks, teacher laptops and the reading program.

• ESSER II: Coronavirus Response & Relief Supplemental Appropriations Act (CRRSA). The NASD allocation is $3,227,353.

• ESSER III: American Rescue Plan Act of 2021 (ARP). The NASD allocation, $6,418,988, is not in the 2021-22 budget.

Kovalchik emphasized ESSER funds are limited in terms of what they can be spent on. A minimum of 20 percent must be spent on “student learning loss,” he said.

In 2021-22 expenditure updates, the NASD instruction budget is $69,970,840, an increase of $841,114 from $69,129,726 in the January presentation.

ESSER expenditure updates include:

• Summer remediation-enrichment program, curriculum and technology resources purchases of $800,000

• Curriculum and technology expenses of $1.8 million

• NASD Cyber Academy, $160,000 increase

• Cyber-Charter Schools, $150,000 increase

• Possible personnel additions in special education and instructional assistants

Kovalchik said HVAC improvements are under consideration at George Wolf Elementary School and Northampton Area High School.

“They’re encouraging us to use some of the (ESSER) money for HVAC,” Kovalchik said.

NASD resident Doug Vaughn said of ESSER funding, “That does free up money from other areas of the budget. It’s something that you need to consider.”

The presentation listed three options to reduce the tax increase of $1,253,500 if the fund balance use of $2,146,894 is increased:

• Use of an additional $306,648 from the fund balance would reduce the tax increase to $946,852 for a 1.5-percent tax increase, or an average $45 per taxpayer.

• Use of an additional $622,265 from the fund balance would reduce the tax increase to $631.235 for a 1-percent tax increase, or an average $30 per taxpayer.

• Use of an additional $1,253,500 from the fund balance would reduce the tax increase to $0 for a 0-percent tax increase.

The 2020-21 NASD tax hike was 0 percent.

The 2019-20 NASD tax hike was 1.97 percent.

The 2018-19 NASD tax hike was 2.01 percent.

The NASD Board of Education voted 8-1 at its Jan. 25 meeting to approve the preliminary budget of $114,852,606, food service fund of $2,502,658 and athletic fund of $257,494.

The timetable for the proposed 2021-22 NASD budget is as follows: April 26, board direction; May 10, board approval; and June 14, board approval of final budget.

The NASD school board next meets 7 p.m. April 26 in the cafeteria of NAMS, 1617 Laubach Ave., Northampton. The public meeting requires COVID-19 check-in, hand-sanitizer use, wearing of face masks and social distancing per Centers for Disease Control and Prevention guidelines.