Cheltenham SD finance committee outlines 3% proposed tax increase to balance 2025-26 budget

Dan Schultz, who opened the Finance Committee meeting on May 6, said staff would present interim financial results for 2024-25 and the proposed final budget for 2025-26.

District staff reported a projected year-end surplus of about $1.8 million for 2024-25, with projected revenue of $137,800,000 and projected expenditures near $136,000,000. For 2025-26, staff presented a proposed final budget that would increase total expenditures to roughly $140,000,000 and requires a proposed 3% property tax increase to balance without drawing down fund balance.

The administration attributed the bulk of the spending growth to contractual salary increases and associated benefits and to rising special-education costs, including out-of-district placements and one-on-one paraprofessional services. Staff said special-education placements have increased across the Delaware Valley and that many private placement slots and related paraprofessional labor are in short supply, which has driven up district costs.

Other drivers identified included higher pension contribution rates (the presentation cited a public-school pension contribution rate that has risen substantially in recent years), cyber-charter and charter tuition (noted at about $3 million in recent years), and general wage and labor-cost pressure. Staff also said locally generated revenues — primarily real estate taxes and earned income tax — have been stronger than last year and that delinquent-tax collections and investment earnings have improved.

The presentation noted state support items that affect the budget: the district continues to receive homestead/farmstead relief through the state’s homestead fund (the district’s certified homestead allotment was stated as $5,070,000 this cycle), and the district previously received a tax-equity award of $1,100,000 that is sitting as a liability pending a board resolution. Staff said an additional tax-equity allotment of about $1,100,000 may be awarded in the coming year but that the proposed budget does not assume the new payment. The presentation also said the district did not include potential, unconfirmed increases proposed by the governor because details were not yet available.

Board members asked for clarifications about assessment appeals, median assessment figures (the presentation used a certified median assessment of $143,170), and how homestead relief would affect individual tax bills. Staff explained that homestead relief reduces the tax bill for qualifying homestead properties and that, because of the homestead increase, a homeowner could see a smaller net change than the raw 3% increase indicates. Staff also said that last year’s tax-equity award is available for next year once the board adopts a resolution accepting it; the administration recommended placing a similar resolution on the June agenda.

Board members and staff discussed the procedural timeline: the district will post the proposed final budget for 20 days for public inspection and advertise for 10 days before final approval. The committee was told the administration plans to present the preliminary/adopt-for-public-inspection budget next week and to seek final board approval at the June 10 legislative meeting (with statutory deadlines permitting adoption by June 30 if necessary).

Several board members requested a separate or joint session with special-education staff to better understand what programs or services the district cannot provide in-house and whether there are strategic opportunities to reduce out-of-district placements and related costs. Staff said those details would require participation by the district’s special-education leadership.

No final vote on the 2025-26 budget occurred at the May 6 meeting. The only formal action taken at the session was approval of the prior month’s meeting minutes.