State Error Costs Northern Lehigh (PA)

May 5, 2010

Fixing an error in the state formula for basic education funding will leave Northern Lehigh School District with $166,000 less than the administration anticipated in the 2010-11 school year.

The Pennsylvania Department of Education’s recalculation will affect 379 school districts. Northern Lehigh is the only school district in Lehigh County affected by last month’s change. The state no longer has data showing how the change affected school districts in surrounding counties, spokeswoman Leah Harris said.

Of the 500 school districts in the state, funding for 121 districts remained the same, 296 districts got an increase and 83 districts received less money than anticipated after the adjustment. The recalculation occurred when the Department of Education realized equalized mill rates from 2007-08, rather than 2008-09, had been used in the funding formula, Harris said.

Equalized mill rates express tax rates as a percentage of market value so taxes can be better compared across district lines

When the state discovered the error in March, the department immediately recalculated the amounts, she said.

“We were kind of upset and taken aback when we found out a mistake was made,” said Northern Lehigh district financial officer Jeremy Melber, who had already proposed a budget. “We were handed a $166,000 deficit.”

About $5.88 billion in basic education funding, which comes from a combination of state and federal stimulus funds, is included in t he 2010-11 state education budget — a $355 million increase, or 6.44 percent, from this year’s funding.

Northern Lehigh schools will still receive $7.12 million — a 4.88 percent increase from the current year’s amount — but, Melber said, the district had been told it would get a 7.22 percent increase next year, and had already built that amount into its preliminary budget.

“Am I happy? Absolutely not. Am I shocked? Absolutely not,” said Northern Lehigh Superintendent Michael W. Michaels. “When you’re dealing with the state, until the state budget is passed, you’re in quicksand.”

The recalculation could have boosted the district’s proposed real estate tax increase from 1.5 mills to 2.25 mills, but the district will still be able to achieve its original tax increase of 1.5 mills through teacher attrition and funding the textbook budget through a projected surplus.

The millage rate for the district is now 62.873. A new rate of 64.373 would increase the real estate tax on a home assessed at $50,000 by $75 to $3,218.

The tax hike would cover growing health insurance, energy costs and retirement costs.

The school board will vote on the final budget in June.