Business manager warns of multiyear shortfall; board approves MCTI and Colonial IU budgets and routine finance items

The East Stroudsburg Area School District's business manager presented a preliminary 2025-26 budget to the board on Monday that showed a sizeable projected deficit in a worst-case forecast and declining enrollment trends, and the board approved several operating budgets and routine finance measures during the same meeting.

Peter, the district business manager, told the board the draft revenue total for 2025-26 is $189,309,441 and that the current preliminary spending plan produced a worst-case projected deficit of $24,578,660 under conservative assumptions (including 0% tax increase). He said the district's audited general-fund balance from 2023-24 stood at about $50.4 million and that projected year-end balances depend on both near-term revenue variance and the board's policy choices.

"This is the worst case scenario," Peter told the board and said the administration will pursue a combination of rightsizing discretionary expenditures, pursuing grant opportunities and presenting forecast models to the finance committee for recommendation.

Budget context and key figures

- Enrollment trend: Peter showed a 10-year decline in enrollment from near 7,000 students to roughly 6,433 in the current year; he said per-pupil budgeted general-fund expenditures for the current year are roughly $31,687.

- Revenue assumptions: the 2025-26 revenue summary in the presentation allocated approximately $107 million from local sources, $76 million from state sources and $4.9 million in federal funds, under the governor's proposed levels and other conservative assumptions.

- Fund balances: audited general-fund balance (2023-24) was $50,400,400; a capital reserve balance of $15,204,191 was listed separately; Peter said the district still had roughly $32 million across those reserves but warned about the long-term trend if deficits persist.

Board actions and votes at the meeting

- The board approved the MCTI operating budget for 2025-26 in the amount of $10,616,412, with East Stroudsburg Area School District's share stated as $2,000,353.45 (the agenda recorded the cents as 34'cent rounding). The vote passed with all present board members voting aye.

- The board approved the Colonial Intermediate Unit 20 operating budget for 2025-26 in the amount of $4,000,331.33; the district's share was listed as $39,532. The motion passed unanimously.

- The board approved a slate of routine finance items and contracts, including the addition of Matthew Krause as district treasurer to complete the term ending 06/30/2025, approval of field trips, employment actions, various invoices for payment (including an Integra invoice for $159,982.39 charged to the NCPA contract), and payment of bills and the unaudited treasurer's report pursuant to Section 687 of the Public School Code. All motions recorded in the meeting passed with the board's unanimous "Aye" votes unless otherwise noted.

Why it matters: Peter emphasized the district is at a crossroads: steady enrollment decline, rising benefit and special-education costs (including charter and out-of-district tuition), and limited near-term revenue options mean the board must consider either expenditure reductions, revenue increases or both in coming months. He said the administration will provide forecast models that will include scenarios with and without tax increases and recommend prioritized expenditure cuts that try to avoid harm to students and services.

Next steps: the business office plans to present a range of forecast models to the finance committee in April and seek the committee's recommendation in May. The board will consider a preliminary budget recommendation in May and a final budget vote in June, with continued efforts to trim discretionary spending and pursue grant revenue.

Ending: Board members thanked the business manager for the detailed forecast and asked for continued scenario analysis; no tax-rate decisions were taken at the meeting.