Eastern York board tentatively backs 1-mill tax increase to shore up budget

The Eastern York School District Board of School Directors on Thursday agreed to advance a resolution recommending a 1.0 mill tax increase to the next meeting for an up-or-down vote, after months of budget work and debate over fund balance, state homestead payments and cyber-charter tuition costs.

The board reached the recommendation following a presentation from business staff on updated budget figures and new state information about gambling-board funding that expands the homestead/farmstead tax reduction. Staff said the district’s preliminary budget two months ago showed about a $3.9 million shortfall with proposed expenditures of roughly $61.4 million and revenues near $57.5 million. After administrative reductions and other changes, the presentation showed a budget scenario with a 0.75-mill increase that would leave the district drawing about $1.79 million from fund balance and an estimated fund balance of $6.5 million at June 30, equal to roughly 6.5 percent of the budget.

Board members and staff debated options including the previously discussed 0.75 mill, a 1.06 mill alternative and a 1.0 mill compromise. Several board members said they preferred the 1.0 mill option because it would increase revenue enough to maintain reserves above critically low levels and help avoid higher borrowing costs in the future. One board member urged caution about the pressure a tax increase places on residents on fixed incomes; others said relying on fund balance risks downgrading the district’s borrowing rate.

Staff described several cost-saving moves the administration has already taken, including attrition that eliminated four teaching positions, targeted staffing reductions totaling about $284,000, reductions to building substitute allocations and special-education placements that the district expects to bring back in-house. The business presentation also noted possible savings from anticipated cyber-school reform at the state level, though the amount is uncertain and could range widely.

Administrators said the state gambling board’s allocation to the homestead/farmstead program would provide a roughly $40 per eligible taxpayer reduction on tax bills; staff estimated the homestead reduction for eligible properties will total about $266 next year after the state payment. The presentation emphasized that the extra gambling-funded payment is treated differently depending on whether it is reflected as recurring basic education funding or as a one-time reimbursement, and staff said they are watching legislative and budget negotiations closely for clarification.

The board also discussed the structure of the district’s fund balance. Board policy recommends roughly an 8 percent unassigned fund-balance target; staff said the district’s current projected fund balance after the proposed action would be near 6.5 percent, below the recommended target. Members noted that keeping adequate reserves affects the district’s ability to borrow and the interest rates it pays; staff said some debt service payments roll off in 2027, which could free capacity for capital projects if the board chooses to preserve rather than spend that savings.

No formal vote on the millage change took place at the meeting; board members voted to place the 1.0 mill recommendation on the agenda for the next meeting for an up-or-down vote. Board leaders also asked administration to continue identifying roughly $1 million in additional savings during the fiscal year, to monitor interest-income projections (which staff said have totaled roughly $800,000–$1,000,000 this year as markets change) and to prepare communications for taxpayers explaining the homestead reduction and the district’s fiscal choices.

The board’s action moves a compromise tax proposal forward while leaving time for further staff work and public notification before a final vote.