Last of three parts

The 2024-25 Northampton Area School District preliminary budget poses what might be termed the charter school conundrum.

NASD is required to pay tuition for students attending charter schools even though the commonwealth does not offset the per-student cost, which is also the case in other school districts in the state.

According to the NASD 2024-25 preliminary budget presentation, NASD will have a shortfall of $6 million in annual charter school funding.

The presentation states charter school costs will total $6 million in the 2024-25 budget, which is a 100% increase in nearly 10 years from that of $2,974,430, which was the charter school costs in the 2015-16 budget.

“Legislative action is needed to address the charter school funding formula,” according to the presentation.

NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Craig Neiman made the NASD 2024-25 preliminary budget presentation at the Jan. 8 NASD Board of Education meeting.

The budget presentation cites a disparity between costs for cyber charter schools and the district’s cyber school.

Enrollment in 2023-24 in cyber charter schools is 140, compared to 131 in the district’s Northampton Cyber Academy (NCA), per the budget presentation.

“Based on NCA tuition rate, cyber charter schools are overpaid by more than $2 million per year,” according to the presentation.

The presentation compares brick-and-mortar charter enrollment to nonpublic school enrollment.

Enrollment in NASD for 2023-24 in brick-and-mortar charter schools is 198, up from 98 in the 2015-16 school year.

Enrollment in NASD for 2023-24 in nonpublic schools is 382, down from 537 in the 2015-16 school year.

“Parents are electing to move students to ‘free’ charter schools rather than pay private school tuition,” per the presentation.

The 2024-25 NASD budget presentation compares special education costs versus subsidies.

Special education costs are $23.6 million in the 2024-25 NASD budget, up from $16 million, or a 50% increase, from nearly a decade ago in the 2015-16 NASD budget.

The state subsidy is projected to be $3.9 million, or 39%, in 2024-25, which is the same since the 2015-16 NASD budget. There is also a federal subsidy.

The percentage of special education students is 19% of NASD students in 2023-24, up from 12% of NASD students in 2015-16.

According to the presentation, the special education shortfall is $19.7 million.

The NASD transportation cost is $7.5 million and the subsidy is $2.9 million - for a shortfall of $4.6 million, according to the presentation.

The “total shortfall of the three state-mandated programs (special education, charter schools and transportation) is over $30 million and is picked up by the local taxpayer,” according to the NASD budget presentation.

The budget presentation addresses the NASD contribution to Bethlehem Area Vocational-Technical School’s annual budget.

In the 2023-24 BAVTS budget, the NASD contribution was $2.9 million, or 27%, of the BAVTS budget, up from $2.6 million, or 25%, in the 2022-23 budget, a $300,000, or 9.5%, increase, according to the presentation.

A school district’s local contribution funding formula is based on a three-year rolling average of enrollment and State Tax Equalization Board (STEB) market value.

According to the presentation, “NASD enrollment and STEB are all increasing.”

The 2024-25 BAVTS budget and district request is expected to be presented at an upcoming NASD school board meeting. Other school districts, in addition to Northampton, contributing to the BAVTS budget are Bethlehem Area and Saucon Valley.

In the 2023-24 Northampton Community College budget, the NASD contribution was $917,646, or 13%, up from $891,501, or 12.8%, in the 2022-23 budget, a $26,145, or 2.93%, increase, per the presentation.

The sponsors’ share formula is based on a five-year rolling average of enrollment and relative mill value determined by STEB assessment and STEB market value as a percentage of all county districts.

The 2024-25 NCC budget and district request is to be presented at an upcoming NASD school board meeting. NCC sponsors, in addition to NASD, are Bangor, Bethlehem, Easton, Nazareth, Pen Argyl, Saucon Valley and Wilson school districts.

The Pennsylvania School Employees Retirement System contribution rate by NASD is projected to be 33.90% in 2024-25, up from 1.15% in 2003, according to the NASD budget presentation.

The NASD general fund balance is $20 million in 2022-23, up from $8 million in 2008-09, per the presentation.

The general fund balance, as of June 30, 2023, includes the following.

• Nonspendable: inventory, $224,613; and prepaid expenses, $121,463

• Restricted: Lehigh Elementary School project escrow, $869,250; and scholarship funds, $131,216

• Committed: $0

• Assigned: Route 329 project escrow, $5 million (restricted as of December 2023); Moore Elementary School renovation, $2 million (committed as of October 2023); capital projects, $3 million (transferred to capital reserve in October 2023); balance 2023-24 budget, $2,125,219; and unassigned, $6,884,688 (within board policy and Pennsylvania Department of Education limits)

The NASD 2024-25 preliminary budget has expenditures of $132.5 million, revenue of $129.1 million and a deficit of $3.4 million. The 2024-25 budget is an increase of $4.1 million, or 3.2%, in expenditures from the 2023-24 budget of $128.4 million.

To balance the budget, 2024-25 initial tax options include an increase of 0.28 mills, or 0.50%, to generate $361,815 in revenue, and use of $3,075,462 from the district fund balance. The average annual tax bill increase for district property owners would be $17.55.

The school board next meets 6:30 p.m. Feb. 12 in the auditorium at Northampton Area High School, 1619 Laubach Ave.