Pine Richland School District faces $2.7M deficit amid stagnant revenue growth

The Pine-Richland School District held a Joint Governance Meeting focused on financial matters on February 12, 2025. The meeting addressed several key topics related to the district's budget, fund balance, and revenue projections.

The meeting began with a discussion on the district's financial outlook, highlighting a projected deficit of $2,776,000. A significant transfer of $6,900,000 into capital projects was noted, which would impact the overall fund balance usage, reducing it from over $11,000,000 in December to $9,700,000. The total remaining in the fund balance and capital reserve is projected to be $29,000,000 after accounting for this year's usage.

A critical point of discussion was the common level ratio, which reflects the district's organic growth. It was noted that this growth has stagnated, primarily due to reassessments affecting a small percentage of properties, particularly large commercial ones. The district's ability to maintain its fund balance has been supported by this organic growth and careful expenditure management.

The meeting also covered the implications of Pennsylvania's real estate anti-windfall provision, which limits the district's ability to benefit from reassessments. Any increase in property assessments would necessitate an adjustment in the millage rate, preventing any significant revenue windfall.

A five-year projection of revenues and expenditures was presented, showing a consistent trend of stagnant revenue from real estate taxes. The district's reliance on local revenue was emphasized, particularly in light of potential cuts to federal funding, which could exacerbate budget deficits.

The board discussed strategies to address the financial challenges, including the potential for a millage increase. The approved limit for any increase was set at 4%, which could generate an additional $2,600,000 in revenue. However, this could limit future revenue options.

Finally, Mr. Masidi provided insights into potential savings through bond refunding, which could help reduce expenditures. The meeting concluded with a focus on evaluating transportation costs and other financial strategies to ensure the district's fiscal health moving forward.

Overall, the meeting underscored the district's ongoing financial challenges and the need for strategic planning to maintain a balanced budget while addressing the needs of the community.