The Northampton Area School District 2023-24 preliminary general fund budget has expenditures of $127,918,870, revenues of $126,077,545 and a deficit of $1,841,325.

General fund expenditures of $127,918,870 are a $7,442,773, or 6.18%, increase.

General fund revenues of $126,077,545 are a $5,601,448, or 4.65%, increase.

The budget, unveiled at the first NASD Board of Education meeting in 2023, could be balanced by taking money from the NASD fund balance or by cutting expenditures, according to district officials.

“There’s various ways to eliminate the $1.8 million deficit,” NASD Superintendent of Schools Joseph S. Kovalchik said after the Jan. 9 school board meeting. “The ultimate goal for the board and the district administration is to have a zero-percent tax increase.”

Kovalchik and NASD Business Administrator Matthew Sawarynski presented the 45-minute, 17-page PowerPoint budget preview for the school board, administrators and public at the meeting. Sawarynski’s last day in the district is Jan. 11. He has accepted a job in the private sector.

The NASD 2023-24 budget is expected to be discussed at February, March and April meetings, with approval planned for the May 8 meeting, or sooner, and approval of the final budget at the June 12 meeting, or earlier.

The 2023-24 budget expenditure summary is as follows.

• Instruction: $73,976,323 - a $1,731,049, or 2.4%, increase

• Support services: $37,523,107 - a $1,994,830, or 5.61%, increase

• Noninstructional services: $1,717,708 - a $45,286, or 2.71%, increase

• Facilities: $3,100,000 for George Wolf Elementary School ventilation and air conditioning project, paid for with Elementary and Secondary School Emergency Relief Funds

• Debt service/transfer: $11,601,732 - a $71,608, or 5.18%, increase

The 2023-24 budget revenue summary is as follows.

• Local: $83,925,846 - a $4,179,770, or 5.24%, increase

• State: $37,462,733 - a $2,579,313, or 7.39%, increase

• Federal: $4,688,966 - a $507,635, or 9.77%, decrease

The 2023-24 budget has numerous expenditure assumptions, according to the presentation.

• Bethlehem Area Vocational-Technical School increase of 10% and Lehigh Career and Technical Institute increase of 3.5%, for an NASD general fund impact of $3 million

• Northampton Community College increase of 3%, for an NASD budget impact of $918,000

• Public School Employees’ Retirement System and Social Security: $800,000 increase

• Cyber/charter Schools: $300,000 increase

• Transportation: $200,000 increase, a contract increase of 2.75%

• Debt service: $600,000 increase, for Route 329 project or renovations

The NASD administration has three special education positions listed in the preliminary budget, one each for the elementary, middle and high school levels.

According to the presentation, cyber/charter school costs are projected at $5.3 million in the 2023-24 budget. For comparison, cyber/charter school costs were $2,280,834 in the 2014-15 NASD budget. The amount doubled in less than 10 years.

Also, according to the presentation, special education costs are projected at $22,804,063 in the 2023-24 budget. For comparison, special education costs were $14,763,904 in the 2014-15 budget. The amount increased 55% in less than 10 years.

Special education students increased from 12% in the 2014-15 school year to 19% in the 2022-23 school year. The state subsidy remained the same, 37% each school year, from 2014-15 through 2022-23 and is anticipated to stay at that rate for 2023-24.

“The state is not providing its fair share for special education,” Kovalchik said.

The presentation compares 2023-24 expenditures versus subsidies for which the total is $35 million, but $6.4 million is received from the state, for a shortfall of $28.6 million.

Special education costs will be $22.8 million, but the state subsidy is $3.7 million.

Transportation costs are $6.9 million, which includes nonpublic school transportation of $1.9 million, but the state subsidy is $2.7 million.

Cyber/charter school costs will be $5.3 million; there is no state subsidy.

The 2023-24 budget has several revenue assumptions, according to the presentation. Based on new housing in the school district, $500,000 of increased revenue is included in the 2023-24 preliminary budget. Also, based on assessment appeals under negotiation for five warehouses in the school district, $3.1 million in increased revenue is included in the 2023-24 preliminary budget.

The 2023-24 revenue update includes an earned income tax increase of $1.1 million.

Basic education funding subsidies increases are not included, but based on 2022-23 amounts, which were increased, this could again increase.

The Elementary and Secondary School Emergency Relief Funds of $3.1 million are expected to conclude with the 2023-24 budget.

The district fund balance, which totals $19 million, could be a source for the administration to balance the 2023-24 budget. The unassigned fund balance is $11.5 million, according to the presentation.

Of the fund balance, the assigned fund balance is $6 million, including the following:

• Route 329 project or renovation: $1 million

• Miscellaneous capital projects: $1 million

• Employee Benefits Trust of Eastern Pennsylvania, a health care consortium of educational entities: $1 million

• Contracts for employee payroll increases: $1 million

• Balance budget: $2 million, which could close the 2023-24 budget deficit of $1,841,325

There’s also the restricted fund balance for the Lehigh Elementary School project escrow of $1 million.

During the board meeting, school directors voted 8-0, with one director absent, to approve, at the recommendation of the administration, a resolution to not increase taxes above the Act 1 index, which is 5.1%, for the 2023-24 fiscal year.

“I can assure you that that’s not going to happen,” Kovalchik said of reaching the index.

The average annual tax increase for the past four years in NASD is 0.87%. There was a 1.97% tax increase for the 2019-20 fiscal year, 0% for 2020-21, 1.5% for 2021-22 and 0% for 2022-23.