Shippensburg board reviews budget scenarios and personnel priorities as Act 1 index falls to 5.3%

Caleb, the district budget presenter, told the Shippensburg Area School District board at its committee meeting that the district’s starting general fund balance was about $17.2 million as of June 30, 2024, and that a $590,552 surplus from 2023–24 had been assigned back into fund balance.

The presentation focused on revenue and expense drivers for 2025–26 and several tax-rate options. “Our Act 1 index for this upcoming year is 5.3%. So we cannot go higher than 5.3%,” Caleb said, explaining the state cap that limits how far the district can raise real-estate taxes without seeking exceptions. He presented five scenarios: no tax increase and increases of roughly 2.6%, 3.5%, 4.5% and the full 5.3% index. Under the no-increase scenario Caleb projected a structural deficit of roughly $3.8–4.2 million for 2025–26 after adding planned additional personnel, a conservative debt-service line and a $200,000 transfer to the capital projects fund. Raising taxes to the Act 1 index (5.3%) was estimated to produce about $1.8 million in new tax revenue from the rate change plus an estimated $326,000 in additional revenue from county growth, for a combined increase of approximately $2.12 million; that scenario reduced the projected deficit to about $2.0 million.

Why it matters: the district is weighing whether to use property-tax revenue as the primary lever to close part of the shortfall while also funding a slate of personnel requests and shoring up a separate capital projects reserve. Caleb reminded the board that the district had a small capital projects reserve (about $256,000 as of March 31, 2025) and that many districts routinely transfer a portion of any year-end surplus into a capital fund to smooth future large maintenance projects, such as roof work at James Byrd.

Personnel and program choices: the presentation included a prioritized personnel list of 10 positions. Caleb said six of those positions were already included in the base budget scenarios; four additional positions were listed as board priorities and shown separately in “scenario add-ins.” A group of board members pressed for clarity on which positions would be funded under each tax option and whether mandated state requirements—like the newly required high-school financial-literacy instruction—should be brought forward now or delayed. Board members repeatedly emphasized the ability to change the proposed tax increase between the proposed and final budgets: the board will vote on a proposed budget (and advertise any tax proposal) before the June 9 final-adoption meeting.

State and federal uncertainty: board members and staff noted two main external unknowns. First, the governor’s budget language appeared modest (Caleb said basic education and special-education line items in the governor’s proposal were up “about $100–200K” each for this district), and broader items such as cyber-charter reform remain uncertain and therefore were not included as savings in the district’s baseline. Second, federal grant timing and availability have varied; Caleb and board members cited past ESSER (federal pandemic) funds that have been rescinded for some districts that had not yet spent them, which makes budgeting cautiously important.

Taxes and homeowner impact: staff updated the board on household impacts by median assessed value. For a typical assessed home in Cumberland or Franklin County, the full 5.3% index increase would add roughly $10–$11 per month for many median properties; scaled-down increases (for example, 2.6%, roughly half the index) would cut that monthly impact approximately in half.

Next steps and board direction: Caleb said the proposed budget will be placed on the board agenda for the April 28 meeting for discussion and then presented for formal advertisement on the May 20 agenda; the final adoption vote is scheduled for the June 9 meeting. Several board members voiced comfort with taxing to the index or near it; others favored a smaller increase and full funding of personnel priorities. The board did not take a binding tax-rate vote at this meeting.

Ending: the board left clear room for adjustments between the proposed- and final-budget votes and asked staff to return with any additional clarifying information—particularly comparisons of the household impact under each tax scenario and confirmation of which of the 10 personnel items would be included under each option.