Shippensburg Area SD sees $590,000 fund‑balance gain; administrators weigh transfers to capital reserve and three tax scenarios

Caleb Barwin, district business staff, told the Shippensburg Area School District Budget & Finance Committee that the general fund fund balance was $17.2 million as of June 30, 2024, a $590,000 increase from the prior year. He said some of that improvement came from additional state “equity” funding and higher‑than‑expected local revenues, including investment earnings and earned income tax collections.

Barwin explained the district’s Act 1 adjusted index for 2025–26 is 5.3 percent, calculated from the state’s 4.0 percent base index plus a locally derived adjustment. He presented three budget scenarios: no tax increase, a 2.6 percent increase, and a full 5.3 percent index increase. Under the district’s assumptions (including a 95% collection rate and no new state aid beyond a possible 1% increase), the scenarios produced projected deficits of roughly $4.1 million (0% increase), $3.2 million (2.6%), and $2.3 million (5.3%). Barwin said those tallies include an assumed $200,000 transfer annually into a proposed capital projects reserve and an estimated $430,000 in additional personnel requests if the board approves items 7–10 on the priority list.

On capital planning, Barwin recommended moving identified future capital projects and maintenance items now sitting in the general fund into a formal capital projects reserve to make long‑range planning and debt projections clearer. He said that would reduce variability in the general fund and allow the district to “pad” a capital line item each year (for example, $200,000–$500,000) to build a targeted savings pool for roofs and other large projects.

Board members probed recent revenue drivers. Barwin and other administrators attributed the $590,000 improvement to a mix of additional state equity funding, stronger local revenues (particularly earned income taxes), and one‑time federal funds such as ESSER that have since tapered. He warned that some federal passthroughs (for example, IDEA funds administered via the intermediate unit) are locally recorded as revenue but depend on external program continuity.

Personnel was a central point of discussion. District administrators presented a prioritized list of proposed staff additions and reclassifications; about half of the roughly $500,000 in requests were already included in the draft numbers, with the remainder (positions 7–10 on the list) adding about $430,000 if included. Administrators said some additions are conversions of contracted or part‑time work into full‑time positions (for example, an existing contracted special‑education IEP compliance resource) and that special‑education enrollment is higher than many neighboring districts, putting pressure on tuition/placement and transportation costs.

Superintendent and board members discussed tradeoffs: moving more money into a capital reserve could reduce volatility and borrowing needs for future projects (for example, a future roof at James Byrd), but that transfer would reduce available general‑fund cash in tight years. Board members also noted the district has run multiple years under the index in prior cycles and is partly “playing catch up” on per‑pupil spending and staffing.

Administrators recommended building a formal five‑ to ten‑year capital plan tied to annual transfers to a capital projects fund and suggested using surplus years (for example, the $590,000) or targeted annual lines to grow that fund. Barwin said state facilities grants and other opportunities would be pursued but cannot be counted on in this budget.

The district will need to advertise a proposed final budget in April; administrators emphasized the numbers could change if new state information arrives, but cautioned the board not to count on large new state increases beyond the governor’s proposed 1 percent.

The discussion closed with board members asking for follow‑up: updated five‑year cash projections, clearer lists of which positions are already budgeted vs. contingent, and an evaluation of how much other comparable districts put annually into capital reserves.