SOUTH WHITEHALL TWP., Pa. — A significant revenue shortfall may force Parkland School District to push another tax increase for the 2025-26 school year, a preliminary budget hearing Monday showed.
Facing $251,669,819 in projected expenditures and $239,297,316 in revenue, Parkland is looking at a $12,372,503 shortfall — unless it pursues a property tax millage increase.
Parkland has the option to raise millage up to 4% — bringing it to 17.80 — following a 5% increase for 2024.Parkland School District Business Administration Director Leslie Frisbie
The 2024-25 school year budget fell more than $4 million in the red, while 2023-24 saw a shortfall of more than $9 million.
District Business Administration Director Leslie Frisbie, who presented the preliminary budget, gave the option to raise millage up to 4% — bringing it to 17.80 — following a 5% increase for 2024.
But Frisbe also described that figure as more of a limit than a prospective increase.
That potential 0.6848-mill increase would yield $6.3 million for the district, Frisbie said.
Such a tax increase would raise the yearly real estate tax bill for the owner of a home valued at $100,000 for tax purposes $68.48 a year — to $1,780.
What is driving expenditures?
Part of the shortage stems from an increase of more than $15 million in expenditures, offset by only a little more than $6.7 million in revenue when compared to the final 2024-24 budget.
While a tax increase appears to be a possibility, Frisbie said the early iteration of the budget requires more data and work before the hard numbers are confirmed.
“We believe this is the 10,000-foot view that we will continue to refine, and when we look back to prior years, when we're at this stage of the game, you know, the budgetary shortfall always is higher than what we actually ended up with,” Frisbie said.
According to Frisbie, the biggest drivers for expenditure increases include $4,804,600 more for salaries; $3,218,743 for health care costs; $2,866,029 in PSERS employer contributions; and $1,393,248 in debt service.
That totals $12,282,620 — or 81% of the total anticipated budget increase.
“For every dollar that we spend in our general fund budget, 66 cents on the dollar goes toward direct and indirect student needs, [including] instruction, nursing services, student activities program,” Frisbie said.
“Twenty-seven cents on the dollar goes to support services and operations… administration, buildings and grounds, transportation, support services; six cents on the dollar goes toward our debt service cost; and then one cent on the dollar goes to other things such as fund transfers.”
More staff, charter school enrollment
Since the 2018-19 school year, Parkland has added 64 professional staff members, 20 support staff, and 12 administrative staff, Frisbie showed.
Overall, excluding substitutes, staff size grew 6.6% to the current level of 1,540 individuals.
Meanwhile, student enrollment also grew from 9,496 to 10,032 students, a 5.6% increase.
“So you can see again, over time, we've had steady growth in both enrollment as well as the tuition rate, going from $2 million back in '13-'14 all the way up to almost $9 million of budgeted expenditures within our budget.”Parkland School District Business Administration Director Leslie Frisbie
Frisbie also pointed to charter schools as a “big ticket item” in the budget, illustrating the increase in enrollment at brick-and-mortar and online programs.
“So going back to [20]13-14 we had a charter enrollment of 79 students," Frisbee said. "Today we have charter enrollment, and that will be brick-and-mortar schools, of 197.
"Back in 2013-14, our cyber enrollment was 99 students. Today, it is around 217.
“So you can see again, over time, we've had steady growth in both enrollment as well as the tuition rate, going from $2 million back in '13-'14 all the way up to almost $9 million of budgeted expenditures within our budget.”
It could be advantageous, Frisbie said, to explore options to draw students back to the district, “but unfortunately, this trending doesn’t look unusual compared to a lot of other districts,” she said.
Frisbie also pointed to fluctuations in the stock market that affected the district’s pension fund.
“We're paying for the retirees as well, so that the plan can get back to appropriately funded status,” she said.
The next steps
Short-term advice during the projections included limiting overtime, evaluating vacancies. and reducing hours worked to control personnel costs.
Also, deferring and/or canceling capital projects, maintenance and replacements, and exploring financing plans for new projects and phasing other projects to control capital spending.
Parkland School Board will have to pass the preliminary budget by January. A budget seminar is currently set for April 2025, followed by a proposed final budget in May 2025. A final budget adoption is expected in June 2025.Parkland School Board
Also, introducing small across-the-board budget cuts and reorganizing programs and departments to adjust organizational strategies.
And revisiting capital reserve transfers, exploring strategies for local revenue projections and looking into options for higher returns on idle cash in order to enhance revenue.
In the future, Frisbie said, the district would need to consider large, sustained budget cuts, reduction or elimination of some programs and services, new feasibility study projects and capital action plans.
It also will need to explore alternative sources of revenue and potentially levying a tax increase.
Parkland School Board will have to pass the preliminary budget by January. A budget seminar is set for April 2025, followed by a proposed final budget in May 2025.
A final budget adoption is expected in June 2025.
