BETHLEHEM, Pa. — After about $2.3 million in recent revenues and further proposed reductions in new-year expenditures for Bethlehem Area School District, a potential 2% increase in real estate tax still could be on the horizon.
The district previously said a 1% millage hike would result in more than $2.6 million in additional revenue for the district.
A 1% increase would mean an average tax bill increase of $36 for Northampton County residents and a $26 property tax increase for Lehigh County taxpayers.
A 1% hike would include a $36 and $26 property tax increase for Northampton County and Lehigh County taxpayers, respectively. The school district is weighing a potential 2% hike.
With some income picking up since the March budget workshop, school district officials on Monday said the upcoming academic year’s spending plan could see a deficit more to the tune of $8 million.
That’s down from about $11.8 million reported last month, when the budget projected $342 million in revenue and $353 million in expenses.
All of the amounts mentioned at Monday’s finance committee meeting and prior meetings are preliminary.
The 2024-25 budget could see initial approval on May 13 and final approval by June 17, according to officials.
'Back to the drawing board'
In the meantime, the district is keeping tabs on what state education aid amounts could look like for the new year and how a potential charter school tuition cap could affect savings.
“We’re gonna go back to the drawing board a little bit, refine our expenses some more. … We’ve already cut back on some of the expenses to the tune of $1.5 million."Bethlehem Area School District Chief Financial Officer Harry Aristakesian
“We’re gonna go back to the drawing board a little bit, refine our expenses some more,” BASD Chief Financial Officer Harry Aristakesian said.
“We’ve already cut back on some of the expenses to the tune of $1.5 million.
"So there’s a little more ‘sharpening of the pencil,’ if you will."
Reserve funding
Beyond the possible tax hike, which hasn’t happened in four of the past five years, the district also is looking to perhaps dip into its fund balance to fill the gap.
Officials look to maintain a reserve of 5% to 8%, keeping at least $18 million handy in assigned and unassigned fund balance.
The total balance currently sits at $25 million.
Superintendent Jack Silva said the district has to be especially particular about when to use those funds.
“We want to manage our fund balances pretty carefully, not just for good stewardship of local revenues but because of state auditors and expectations about districts carrying their funds."Bethlehem Area School District Superintendent Jack Silva
“We want to manage our fund balances pretty carefully, not just for good stewardship of local revenues but because of state auditors and expectations about districts carrying their funds,” Silva said.
“We also want to be mindful of that committed fund balance helps us finance new school projects so that you basically borrow off ourselves instead of higher-cost borrowing on bond issues.”
The district has accounted for taking on $15 million to $20 million in debt to put up a brand new elementary school in Fountain Hill.
Debt service makes up one of BASD’s biggest budget line items, behind salaries and benefits and charter schools.
Here’s a recap from the March budget workshop with more details on the 2024-25 spending plan.
