Finance committee weighs three tax options as 2025–26 preliminary budget shows multimillion-dollar deficit

The East Stroudsburg Area School District Finance Committee on May 12 reviewed the administration’s preliminary 2025–26 general fund budget and voted to send three budget options — a 0% tax change, a 2% tax increase, and a 3.5% tax increase — to the full board for consideration.

Peter Contrillo, staff member, presented the budget and outlined a range of assumptions and impacts. He said health-care costs rose 13% year over year and called out electricity and cyber-insurance cost increases; he described net movements that produced a projected net increase from the preliminary budget of about $619,000. “Healthcare costs increased 13% year over year,” Contrillo said while summarizing major drivers.

Contrillo told the committee the district had received notice on May 1 of an increase of roughly $991,000 in Homestead/Farmstead relief for homeowners, and he explained how that state program reduces tax bills for qualifying primary-residence homeowners. He presented three options: no tax increase (option 1), a 2% increase (option 2) and a 3.5% increase (option 3). Under option 1, Contrillo showed a worst-case projected deficit of about $23.4 million (driven in part by assessment-appeal losses on large properties, which he said caused a $1.6 million local revenue shortfall). Option 2 would recoup the cited $1.6 million loss and reduce the projected deficit to about $21.8 million; option 3 would raise roughly $3.2 million and produce a projected deficit near $20.2 million.

Contrillo walked trustees through homeowner impacts, saying that because of the increased Homestead/Farmstead relief, primary-residence homeowners who qualify would still see a year-over-year reduction in their tax bills under the scenarios presented. He gave a worked example for Monroe and Pike county homeowners showing monthly impacts under each option and stressed the compounding effect of leaving potential revenue “on the table.”

Board members asked clarifying questions about fund-balance classifications, historical commitments, and whether expense reductions could narrow the deficit. Rich Andrews, board member, pressed on the conservatism of the deficit number and whether the district might land significantly below the $23.4 million worst-case assumption; Contrillo explained the administration budgets conservatively and hopes to land lower than the worst-case assumptions. Trustees also discussed charter/IU costs and whether returning charter-enrolled students would materially reduce outside-provider costs; administration said it's a variable they are pursuing but would not bake reclaimed enrollment into the budget without stronger evidence.

The committee voted to move the preliminary budget forward to the full board with all three options presented; the committee recorded a 3–1 committee vote on presenting all three options. The administration said it will prepare PDE (Pennsylvania Department of Education) forms for the options and have the district sign whichever option the board selects.