Credit: The Reporter.
The 2025-2026 budget outlook projects an estimated $159 million in revenues and $165 million in expenditures, producing a $6 million deficit.
The Pennridge School Board may face some difficult budgetary decisions in the future as the district’s rising costs are outpacing revenue growth.
Business Administrator Sean Daubert delivered the message to the school board’s finance committee Monday, Feb. 10 during his annual budget outlook presentation, which provides an early projection of the district’s upcoming revenues and expenditures.
The 2025-2026 budget outlook projects an estimated $159 million in revenues and $165 million in expenditures, producing a $6 million deficit. The figures, however, are projections and do not include savings from upcoming retirements and funding changes that will be made throughout the budget process, stressed Daubert.
Daubert attributed the district’s financial situation to slower revenue growth. Like most Pennsylvania school districts, Pennridge primarily relies on local tax revenue, including real estate taxes and earned income taxes (EIT). Daubert noted that real estate taxes have largely remained flat, while EIT revenue has “slowed considerably” after skyrocketing in the post-COVID years due to wage increases.
“We’re not seeing as much growth in real estate tax rate or EIT growth we’ve seen over the last four or five years,” said Daubert. “Those are our two main sources of revenue. When those two start to slow down in their growth, we feel that in not being able to keep up with the expenditures.”
Pennridge has not raised its real estate tax for the past eight years, in contrast to many other area school districts.
Daubert also pointed to lower state funding increases following 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.
“They have moved away from a system of everyone getting a percentage of the pie based on the court ruling,” said Daubert. “They are now targeting those dollars to poorer districts. They definitely need it, but that has left very little money for the other districts.”
Gov. Josh Shapiro’s recently-unveiled 2025-2026 budget proposal would allocate $494 million in new funding to the state’s neediest schools, of which Pennridge would receive roughly $90,000.
The proposal also includes $75 million in new basic education funding, a marked decrease from the previous year, noted Daubert. Pennridge would receive an additional $128,000 in basic education funding and $11,000 in special education funding, amounting to 0.94% and 0.27% increases, respectively.
But despite diminished revenue growth, district expenses continue rising, said Daubert. He pointed to 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, he noted that the increases were not budgeted, due to the contract’s late approval.
Daubert cited charter school tuition as an additional expense. 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, the same proposal was rejected by the state legislature during last year’s budget process.
While reviewing potential solutions, Daubert said that this year’s maximum allowable property tax increase is 4%, which would generate an estimated $3.5 million in additional revenue, short of the projected $6 million deficit. He also noted that the maximum allowable tax increases are set to decrease in the coming years.
“So in order to balance the budget, we would have to find cuts, even if we [enacted the maximum property tax increase] each year, we’d still have to find cuts in there,” Daubert said. “Our ability to raise revenue is decreasing, but the costs continue to go up, and a lot of those costs we don’t have any control over.”
“So fundamentally, we’re struggling in the future,” replied board president Ron Wurz.
Daubert predicted that district expenses will continue to increase and that spending cuts will be insufficient to balance future budgets, potentially necessitating some tough decisions.
“If we don’t put revenue in place to offset that, then I don’t think we can do it all through cutting expenditures moving forward,” said Daubert. “There’s too much growth in expenditures and there’s too much competition out there for people and resources.”
This article appears courtesy of a content share agreement between North Penn Now and The Reporter. To read more stories like this, visit https://www.thereporteronline.com.
