Independent consultants warn of large deficit; board approves budget adjustments and schedules tax scenarios for next meeting

Consultants who reviewed East Stroudsburg Area School District finances told the district finance committee that the district faces a material budget shortfall and recommended adjustments to the preliminary 2025–26 budget that the committee voted to advance for board consideration.

"Hello. Good evening, everyone. My name is Jim Marabelli," said Jim Marabelli of School of Business Consultants, who presented the review along with Joe Caputo. Marabelli summarized his team’s independent analysis of revenues and expenditures and described adjustments the consultants recommended to the preliminary budget.

The consultants said current-year variances and policy choices have produced what they view as a realistic shortfall: a projected $12,700,000 deficit for 2024–25 and, after proposed adjustments, a $28,300,000 gap for 2025–26. "After everything you just the 25/26, we're looking at $185,600,000 in revenue versus $214,000,000 in expenditures for a deficit of $28,300,000," Marabelli said during the presentation. The consultants said their estimate is independent of internal forecasts and built from district accounting records, audited financials, and state reporting.

Why it matters

The consultants pointed to a set of drivers that together widened the gap: a large increase in salary and benefit costs tied to a newly ratified teacher contract, unusually high health-insurance claims and a late premium payment to the district’s self-insured trust, higher special-education and charter-school tuition costs, and more modest local tax growth after assessment appeals.

Key findings and figures

- Teacher salaries and benefits rose sharply in 2024–25 after a new contract. The consultants reported teacher salaries rose from roughly $46 million in 2023–24 to about $54 million in 2024–25, an increase the consultants attributed largely to the new contract and step movement.

- Health insurance: the consultants said the…