Credit: The Reporter.
The Pennridge School Board is facing some tough budgetary decisions for the 2025-2026 school year, with a projected $3.3 million deficit amid a looming June budget deadline.
The news was shared by Business Administrator Sean Daubert on Monday, April 14 during the board’s finance committee meeting. Daubert pointed to soaring district expenses amid sluggish local revenue growth and insufficient state funding.
“Everything is so volatile right now,” said Daubert. “To see the local revenues contract at the same time that state revenues aren’t coming in and with the scare at the federal level; it’s a very scary time.”
Current 2025-2026 budget projections show roughly $160 million in revenues and $163.3 in expenditures, yielding a $3.3 million deficit. The figures, however, are projections as district officials continue working on finalizing the budget.
Pennridge has not raised taxes since the 2016-2017 school year, in contrast to most area school districts. Daubert attributed the district’s current situation primarily to flat local tax revenue, including real estate taxes and earned income taxes (EIT), which account for over 70% of the district’s budget.
“We’re budgeting half a percent increase in revenue. That’s unheard of,” said Daubert. “We’re usually budgeting three or four percent increases in revenue. But neither real estate taxes or earned income taxes are growing this year.”
Daubert also cited lower state funding increases. Under Governor Shapiro’s proposed 2025-2026 budget, Pennridge would receive a total increase of $25,000, a marked decrease from previous years. The decrease follows a 2023 Commonwealth Court ruling deeming Pennsylvania’s school funding system “unconstitutional,” prompting the state to begin steering the bulk of new education funding to low-income school districts. Pennsylvania is also facing a projected $4.5 billion budget deficit, according to the Independent Fiscal Office.
Additional challenges include the elimination of COVID-19 pandemic relief funding, the non-renewal of charter school reimbursement funds and potential interest rate cuts, said Daubert. He also raised concerns about the district’s $2 million in federal funding following President Donald Trump’s executive order to abolish the Department of Education. (The move requires Congressional approval).
“This is uncertain at this point. Things change on a daily basis at the federal level,” said Daubert. “We’re proceeding as if it’s gonna continue, and we’ll do that until we know something better.”
But despite diminished revenue growth, district expenses continue rising. Topping the list are pensions, charter school tuition and special education, all of which are mandated by state law, said Daubert.
“The issue is that we are mandated to do so many things on the expenditure side, and we are so limited in our ability to raise money to pay for those things,” said Daubert. “The state says, ‘You must pay, and by the way, you can only have this much revenue.’”
The district is also facing $2 million in additional expenses from the new teachers’ union contract, which includes annual 3.5% increases in salaries and benefits for staff and support personnel, in excess of the district’s standard 2.5% increases. While stressing that the contract was needed to retain and attract staff, Daubert noted that the increases were not budgeted due to the contract’s late approval.
“We all agree it was the right thing to do at the time, but now we must deal with the impact of it,” said Daubert.
Daubert additionally highlighted a 200% increase in charter school tuition costs from the 2009-2010 to 2022-2023 school years. Charter schools are funded by tuition payments from public school districts. Currently, Pennridge is required to pay flat $14,000 and $38,000 tuition payments for non-special and special charter education students, respectively, regardless of the student’s enrollment in a brick-and-mortar or cyber school or the services administered.
While Shapiro’s budget proposal includes an $8,000 charter school tuition cap, estimated to save school districts $378 million annually, Daubert cast doubt on its prospects, noting that similar reforms have consistently been rejected by the state legislature.
Daubert said that stagnant local tax revenue, state funding reductions and federal funding concerns amid soaring district expenses have created a “perfect storm” for the district. He added that local and state funding are unlikely to return to previous levels.
“I’e never stood up here and cried wolf,” said Daubert. “I’ve done this for 10 years. We raised taxes the first year I was here, and we haven’t raised taxes since. But there’s a lot of warning signs out in front of us in the next few years that are very scary.”
Despite the district’s financial woes, the proposed budget maintains funding for a new school psychologist, two autistic support teachers, two full-time speech teaching assistants, new curriculum materials, an expansion of the high school STEM curriculum and a full-day kindergarten program, which will include a lottery system for select students in 2025-2026 school year before a universal roll-out in 2026-2027 school year.
Funding requests for additional support personnel, including four new learning support teachers, two autistic support teaching assistants and eight teaching assistant positions, were eliminated, said Daubert. Additional savings came from reducing funding for maintenance equipment and replacement busses.
While reviewing potential solutions, Daubert pointed to this year’s maximum allowable property tax increase of 4%. The increase would generate an estimated $3.5 million in additional revenue and amount to an extra $171.83 per year for the average property owner. Daubert added that the maximum allowable tax increases are set to decrease in the coming years.
In addition to a tax increase, Daubert suggested reducing staffing levels. He noted that student enrollment over the past seven years has declined from 7,3000 to 6,100, while staffing has increased.
“There’s things going in different directions,” said Daubert. “We need to do this on a multiple-year plan to recalibrate this district and bring expenditures back in line with the actual student body we have, bring employee levels back in line with actual student body we have.”
Superintendent Angelo Berrios cautioned against tapping into the unassigned fund balance, used primarily for emergency capital repairs. Daubert responded that the district may have no alternative due to uncertainties surrounding federal and state funding and potential interest rate cuts.
“So we could put this budget in place, and we could still end up short on the revenue side because those things fall away,” said Daubert. “We’d have to pull from our fund balances that we have in place to make it through next year.”
Board president Ron Wurz said the situation leaves the board with little choice but to raise the property tax.
“I see no other way around this than increasing the tax rate,” said board president Ron Wurz. “We could push this off a year and rob from the fund balance, but that’s not being good stewards of the school. It might be politically good to do that, but that’s not what this board is about.”
Board member Leah Rash noted that other school districts are contending with similar deficits. She expressed concern for the future of public schools without community action.
“This is a gritty situation. I’m worried, not just for Pennridge but all the public schools around us,” said Rash. “This is a potential downward swing we’re on. And if people don’t wake up and do something, our public schools are in trouble.”
The proposed final budget will be presented to the board on May 12, with final adoption scheduled for June 16.
The next Pennridge school board meeting is on April 28 at 7 p.m. For more information, visit pennridge.org
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