Bethlehem Area School District generic

BETHLEHEM, Pa. – The Bethlehem Board of School Directors on Monday night unanimously approved a $315 million budget for 2021-22, which calls for a 2% increase in taxes for property owners.

As a result of the board’s action, the millage rate in Northampton County will increase from 56.17 to 57.76 and in Lehigh County from 18.65 to 18.78 — the first increase in two years. Real estate tax is calculated by multiplying the millage rate and the assessed value of the property.

Superintendent Joseph Roy said there were no major changes in the spending plan from when the board approved the preliminary budget a month ago. The district is using the tax increases, which will raise about $4 million, and $3.8 million from the district's fund balance to close the $7.7 million budget gap.

The 2% tax increase could have been avoided if the state would enact funding reforms, such as setting tuition for cyber charter schools, Roy said, adding that the district is underfunded by $20 million. It's important to keep that in context as the district asks the community to pay more in taxes, he said.

The tax increase of 2% "is driven by state’s failure to fund us," Roy said, adding that board acted responsibly in adopting a budget with a minimal tax increase.

Board President Michael Faccinetto echoed Roy's sentiments about the uncertainties in the state's budget process, noting that it would be useful for the state to make its funding commitments earlier, to allow school districts to more efficiently plan their budgets.

While the district is receiving nearly $50 million in federal aid from the CARES Act, that money can be used only once for COVID-19 relief and can't be used to pay recurring bills, Faccinetto said.

Vice President Shannon Patrick thanked the administration for developing a budget with a minimal tax increase in the face of "a crazy year" with the pandemic.

According to the summary, the budget includes $304.2 million for ongoing programs with $11.5 million for academic recovery and other learning supports such as technology upgrades, hot spots and Wi-Fi connectivity for use at home, for a total annual budget of $315.8 million. This represents approximately a 2.3% increase in ongoing programs and a 4.58% overall increase from the 2020-21 budget of $302 million.

Other expenditures include increases in mandated costs for pensions, charter schools and special education. The growth in these largest mandates have continued to outpace the growth in the district’s operating costs for many years. These mandated costs are increasing faster than other operations at more than 5% without corresponding subsidy growth to fund these mandatory services, the summary notes.

The budget also supports tuition payments to other outside programs such as Bethlehem Area Vocational Technical School at $7.4 million, Northampton Community College at $2.5 million and Colonial Intermediate Unit 20 at $14 million. Tuition to charter schools is $33.9 million, which is the district's entire state Basic Education Subsidy, leaving zero state funding for the 13,000 students in the district's public schools, according to the summary.

"The bottom line is that pension and charter school tuition costs are the greatest threat to the financial stability of the district," the budget summary states.

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