Danville administration recommends full Act 1 index (4%) amid state funding changes and staff reductions

Business Manager (Mr. Mavis) and Superintendent (Dr. Neid) reviewed the proposed 2025‑26 school budget and the recommended local tax action.

Lede: The administration presented a balanced preliminary budget totaling $48,474,910.63 and recommended the board adopt a proposed local real‑estate tax increase up to the Act 1 index of 4% (which would raise the district millage from 12.4218 to 12.9186) to offset projected shortfalls tied to a change in the state school funding formula that reduced Danville’s state Basic Education Funding (BEF) relative to prior expectations.

Nut graf: Administration said the district has taken steps to control expenditures — eliminating 21 full‑time equivalents since 2022 and realizing roughly $2.0 million in recurring annual salary/benefit savings — but that a recent court‑ordered reallocation and a new state funding formula left Danville with approximately $500,000 less than it would have received under the old formula; governor’s proposed budget adds only a modest increase for BEF. The administration recommended using the full Act 1 index in 2025‑26 to stabilize revenues while continuing to monitor state and federal action.

Body: Mr. Mavis described the budgeting timeline, the district’s revenue assumptions and key vulnerabilities. Expenditure side highlights: total proposed expenditures of $48.47M (includes a minor increase to capital reserve transfer and an updated FTE count that lowered staff costs this month). The administration noted health‑insurance timing: because the current contract year extends into 2026, the 2025‑26 budget does not include an immediate premium increase but projected health cost increases of 10–15% should be expected in subsequent years if cost trends continue.

Revenue side highlights: the budget assumes a 4% local real‑estate tax increase under Act 1, a one‑time realistic upward adjustment to earned income tax (EIT) revenue for 2025‑26 (administration provided figures and said the change was intended to reflect recent collection trends rather than conservative under‑budgeting), and level federal funding. Mr. Mavis flagged large local assessment volatility tied to the Cherokee plant (a single major local real‑estate account worth roughly $800,000 in taxes) and urged board awareness of that exposure.

State funding changes: the administration explained a court ruling and subsequent legislative changes created a new state funding formula (referred to in presentation materials as a reallocation); Danville’s BEF intake declined by approximately $500,000 in the current year because of the reallocation, and the projected governor’s budget provides only a small (half‑percent) increase to BEF next year. The new formula’s implementation timeline is multi‑year and is expected to have compounding effects.

Next steps: the administration asked the board to consider a proposed budget vote (or resolution to propose) at a special meeting after the May Committee of the Whole (suggested May 7) to satisfy the 30‑day public posting requirement; approval of the preliminary budget and the homestead/farmstead resolution would allow the district to publish a proposed budget and proceed to final adoption in June. The administration also noted a discretionary capital reserve transfer included in the budget and suggested the board could adjust that line if it preferred.

Ending: Administration emphasized the district’s recent staffing reductions and spending‑control efforts and asked the board to weigh the state funding impacts, the known local assessment volatility, and the near‑term need to set a preliminary millage. The board will consider the recommended Act 1 index increase and the administration’s proposed figures at upcoming meetings.