Southern York County SD reviews proposed 2025‑26 budget; projects $2.7M deficit without tax increase

Southern York County School District staff on Wednesday presented a proposed 2025‑26 budget that projects $65.7 million in revenues, $68.4 million in expenditures and a $2.7 million deficit that the district plans to cover from fund balance rather than raise taxes.

The presentation by Sue Green, a district staff member, and Trevor Carrington, a district staff member, outlined revenue gains of roughly 2–2.6% and expenditure growth near 3%, while flagging several vulnerabilities including recurring health‑insurance increases, uncertain state funding, and the possibility that elevated interest earnings may decline. "Even though we came in better on revenues, we actually still are using fund balance," Green said during the briefing.

Why it matters: the district plans to present a proposed budget for board approval on April 10 and a final budget in May that will set the tax rate and the homestead/farmstead relief amount. Board members and staff said relying on fund balance and volatile revenue lines — primarily interest earnings and one‑time state or federal grants — increases future budget risk.

District finance overview

Carrington told the board that local revenue remains the largest source, with real estate taxes comprising about half of total revenue and earned income tax about 11%. "Most recently last year interest earnings were $1,600,000," Carrington said, noting that interest income has been unusually large recently but is not a dependable long‑term revenue stream.

The presentation showed net changes since a November draft reduced the planned use of fund balance from about $4.7 million then to $2.7 million in the current projection. The district reported it budgeted to use $2.4 million of fund balance in the earlier plan and is now projecting a better revenue picture but still a net use of fund balance of roughly $1 million for the 2024‑25 projection and $2.7 million planned for 2025‑26.

Major cost drivers and staffing

Staff and benefits account for about 69% of the budget. The district recommended reducing three professional staff positions next year, and officials said any unfilled positions would be handled through attrition rather than layoffs. Employee benefits for 2025‑26 are projected to increase by about $1.2 million (6.93%), driven mainly by retirement contributions and health insurance.

Green described health insurance as a significant recurring pressure: "It is a big number for us on health insurance." She summarized recent increases as roughly 15% in 2023‑24, 17% this year and another 15% in the current estimate, and said the district sent $490,000 in 2024‑25 to Lincoln Benefit Trust reserves with the possibility of sending an additional $350,000.

Other budget changes and new items

The budget removes an $838,000 phased‑in millage for future building renovation needs that had been included in earlier drafts. Transfers approved earlier in the year moved $1.7 million into capital reserve.

New or added positions and programs in the proposed 2025‑26 budget include the district's newly hired school safety and security coordinator, Mr. Leitzel; an assistant girls tennis coach; a separate girls wrestling program; a staff wellness program (entering year three with added offerings); and a replacement radio budget for worn equipment.

State, federal and grant funding

District staff placed a conservative 2% increase in basic education and special education subsidies in the 2025‑26 revenue estimate and incorporated several other state streams received in 2024‑25, including charter school reimbursement and new adequacy ("ready to learn") funding. Staff cautioned that the governor's proposed budget and final legislature action can differ and that state timing rarely aligns with the district's tax‑billing schedule.

Federal ESSER relief funds have diminished, Carrington said, producing a year‑over‑year federal revenue decline of about $114,000 as the one‑time COVID relief funding ends. Staff highlighted PCCD safety grants and transportation subsidy increases as additional items that helped revenue this year but warned these are not guaranteed long term.

Fund balance and capital planning

The district reported an audited fund balance of about $30 million at the end of the last fiscal year and projected approximately $26 million at June 30, 2025, after anticipated payouts for the high school project and other items. Staff outlined assignments from that balance, including roughly $18 million set aside for future capital projects and smaller assignments for known obligations such as a sewer project and Lincoln Benefit Trust.

Next steps and board process

Green and Carrington asked the board to approve a proposed budget on April 10; the board would set the tax rate and finalize the budget in May, after which tax bills are prepared for the July billing cycle. Carrington emphasized that anything can change between April and May and that the district must be prepared for legislative shifts.

Questions during and after the presentation touched on York County School of Technology's feasibility study and the potential financial and programmatic impacts if that regional program expands; staff said any expansion proposal would come to area boards for approval and that cost shares historically tie to market value‑aid ratios rather than student counts.

No formal change to the budget was voted at the meeting. The board adjourned the session by unanimous voice vote.