Northern Lehigh finance staff recommend setting preliminary tax index at adjusted 4.8% amid $2.16M shortfall

Sherry, the district's finance lead, presented the proposed preliminary budget for the 2026-27 fiscal year and warned the committee that projected recurring expenditures—principally salaries, healthcare (an increase the presentation cited at roughly 17%), and state retirement contributions—create a shortfall. The presentation showed projected expenditures of about $44.22 million against projected revenues of roughly $42.20 million, leaving a deficit near $2.16 million before any tax action.

Administration recommended two steps to preserve options: (1) use fund balance for specified one-time purchases and debt-service timing, and (2) pass a preliminary tax index at the district's adjusted index of 4.8 percent (the district noted an effective overall rate of about 4.37 percent given county equalization factors) so the board retains room to lower the rate later if desired. The administration said using fund balance for one-time items would reduce available reserves but noted many of the purchases are capital or one-time facility needs.

Board members raised concerns about asking taxpayers to absorb repeated increases after recent levy work and asked for scenarios showing taxpayer impacts at different quarter-point increments; administration agreed to present per-household impact scenarios and homestead/farmstead adjustments at the full-board presentation. Committee members also discussed enrollment trends, cyber and charter costs, special-education placements, and the capital plan, including funds set aside for flooring projects and other items.

What comes next: Administration will put a preliminary budget item on the full-board agenda with recommended preliminary tax authorization at the adjusted 4.8% index and will provide tax-impact scenarios for board review. Final budget decisions (including any tax rate) will occur in June.