Millcreek Township SD presents preliminary 2025-26 budget with proposed 3% tax increase, $3.7M gap and proposed earmark changes

District staff presented the Millcreek Township School Districtpreliminary budget for 2025-26, describing a proposed 3% tax increase, rising healthcare and transportation costs, and a projected shortfall that staff said would require policy changes and use of fund balance to balance the budget.

The presentation laid out revenue and expenditure drivers and identified a near‑term gap the district must close before final budget adoption. Staff described transportation increases of about $962,000, a health-care cost increase of about $1.4 million (13%), and other expense increases that together create a structural shortfall staff estimated at roughly $3.7 million under one set of assumptions.

The presenter described the revenue mix and how local reliance differs from many Pennsylvania districts: "66% of our total budget is locally generated... 51% of our total budget is real estate taxes," a staff member said, and later stated, "the proposed budget includes a 3% tax increase." The presenter explained that the districtrelies heavily on local revenue and that inflation has eroded purchasing power: "Since 02/2019, MGST is, 4.64% behind CPI and 13.14 behind COLA," the staff member said.

Staff walked the board through enrollment, staffing and mandated service changes that underpin cost increases: declining enrollment (from about 7,200 to 6,400 students over the period cited), a rising percentage of students eligible for free and reduced-price meals, more English learners (up to 5.4%), and an increase in special education students to about 20.8%. Those demographic changes prompted staff to add positions, including special-education teachers and aides, multilingual learner staff, and additional security staff to place a School Safety Officer at each building.

Key numbers and cost drivers presented by staff included: - Transportation increase: approximately $962,000 (presenter tied this to contractor bid outcomes). - Health care increase: approximately $1,400,000 (13%). - Custodial equipment and equipment line items: about $700,000 requested. - Curricular resources and utilities: increases shown separately in the presentation (hundreds of thousands of dollars). - District revenue: presenter said 66% locally generated, and 51% of budget from real estate taxes. - Staffing changes: net increases in teachers and educational assistants; added SSOs to reach 12 districtwide.

On balancing options, staff described three primary tactics: spending reductions and cuts in building/department budgets (the presenter said staff were cutting about $765,000), using fund balance for one-time equipment purchases (staff proposed using about $1.5 million of fund balance), and revising a prior board motion that earmarks investment income. The presenter proposed revising the motion (from about 2018/2019) to earmark only 50% of investment income rather than 100% — splitting it 25% to capital projects and 25% to committed fund balance — which staff said would free roughly $900,000 to help balance the budget.

Staff summarized the draft projections: under the presenterassumptions the 2025-26 budget showed a shortfall of roughly $1.5 million before accounting for earmarked funds, and when reversing some earmarks the structural shortfall rose to about $3.7 million. The presenter said the district planned to bring a proposed final in April and ask for approval in May. "What we'll do is that in April, committee will have our proposed final. Well, no. We'll go through, and then May, we'll ask for approval of the final," the staff member said.

The transcript records questions from board members about details such as replacement cycles for student and staff devices, fleet age requirements for buses, and the districtuse of state adequacy supplements. Staff repeatedly noted some numbers were preliminary and subject to change when final insurance and other contracts were set: "...there's still a lot of moving parts with this that we need to solidify the numbers," the presenter said.

No final budget approval or formal vote was recorded during the presentation. Staff said they will return to the board with refined numbers, a revised motion on investment-income earmarks and a proposed final budget for a May vote.