East Stroudsburg district projects large 2025–26 shortfall, business manager presents conservative budget options

Peter Barth, the district business manager, presented the East Stroudsburg Area School District’s first formal 2025–26 budget draft on Feb. 24, telling the school board the district’s most conservative estimate shows a potential $24,459,677 shortfall for the coming fiscal year.

Barth said local tax revenues and state aid compose the district’s two largest revenue streams and that a recent state “tax equity” payment and other timing issues affect how revenue appears this year. “The most important thing to note here is the decline in the values for Monroe County. We’re seeing a decline of $12,000,000 or a little under $13,000,000 for Monroe County,” Barth said during the presentation.

The presentation outlined revenue of roughly $189 million against projected expenditures of about $213 million, yielding the conservative deficit figure. Barth said the estimate includes known changes such as the end of ESSER federal funds, a modest increase in state subsidy that is driven in part by one‑time items, and a projected 11% rise in health insurance costs. He told the board the district’s general fund balance is being used to smooth the gap and that capital reserves of roughly $15 million are restricted for capital needs.

Why it matters: district leaders said the budget picture is driven by structural forces — state subsidy formulas, appeals to commercial property assessments, escalating personnel costs and the end of pandemic‑era federal aid — and by timing rules for recent state block grants. Superintendent Dr. Michele Vitale (identified in the meeting as Dr. Vitale) and Barth told the board they prefer to present a conservative model now and return in March with additional scenarios that show shorter‑ and longer‑term impacts and potential revenue or expenditure adjustments.

Key details from Barth’s presentation: - Revenue drivers: local sources (about 57% of general fund revenue), state sources (about 41%), federal (about 3%). The draft shows approximately $107 million in local revenue and $77 million in state revenue. Barth confirmed the state’s “tax equity” allocation of roughly $5.5 million is included in the revenue line but that regulatory timing means the district will recognize the money now and be restricted from spending some of it until the next fiscal year. - Expenditures: salaries and benefits were the largest items (about 72% of budgeted spending), with salaries roughly $90 million and benefits about $64 million. Barth noted benefits are projected to rise about 7% with health insurance up an estimated 11%. - Fund balance and reserves: the district’s total fund balance (general fund plus restricted capital reserves) remains substantial, but the general operating fund is projected to fall to an ending balance near $8.5 million under the conservative scenario. The capital reserve (about $15 million) is restricted for capital projects.

Board response and next steps: members pressed Barth and the administration on specific revenue and expense lines and asked for alternative forecasts. Dr. Vitale described the presentation as a conservative “worst‑case” model and asked the board for feedback so staff can prepare options for March. Barth promised to produce scenario models showing the five‑year trajectory under different policy choices and to continue fine‑tuning revenue estimates before the May/June budget votes.

Votes at a glance (actions listed elsewhere on the agenda): several agenda motions unrelated to adopting the final 2025–26 budget were approved that evening, including approval of the program of studies and several personnel actions; one beverage agreement item was tabled for further review. The board did not adopt the final 2025–26 budget at this meeting; administration said it will return with refined models and choices.

What to watch next: the administration will return in March with modelled options and recommended next steps; formal budget adoption is scheduled in May with a final vote in June. Barth and Dr. Vitale encouraged the public and board members to review the scenarios and to provide questions before the March presentation.

Ending: Barth closed by noting the district will look for revenue opportunities and will consider options such as debt‑service restructuring, additional revenue forecasting measures and expense adjustments. “We wanted to bring to you just the initial numbers so you know kind of where we’re at,” Dr. Vitale said, adding that the administration will present refined options next month.