Centennial SD finance director warns of multi‑million dollar shortfalls in five‑year plan

Centennial School District staff told the board Tuesday that the district faces multi‑million dollar structural deficits over the next five years, driven by contractual salary increases, limited state funding growth and the end of pandemic‑era federal aid.

At a presentation that opened the budget discussion, a district finance presenter summarized projections from fiscal 2026 through 2030 and said the district is “running deficits” even with the Act 1 index included in the modeling. The slide deck projects a roughly $4.2 million shortfall for fiscal 2026 under a full Act 1 (4%) assumption, and warned that lower Act 1 increases would worsen the gap.

The presentation placed several figures in context: the Act 1 index at 4% contributes about $900,000 in additional revenue; the Centennial Education Association (CEA) contract accounts for an estimated $2.5 million in annual increased expense; a $2.9 million transfer from the debt‑service fund was used to balance last year’s budget; and the governor’s preliminary state budget was expected to add about $260,000 combined for basic and special‑education funding.

District staff walked the board through the mechanics: reducing the Act 1 increase from 4% to 3% would raise the deficit by about $900,000; the CEA contract alone represents roughly 2.7 percentage points of the Act 1 increase in projected cost; support‑staff and administrative increases were modeled at 1% (about $250,000 and $65,000, respectively) and would rise proportionally with higher negotiated percentages.

Board members pressed staff for detail on assumptions and related line items. One board member asked that Middle Bucks Institute of Technology (MBIT) and Bucks County Intermediate Unit (BCIU) request numbers be included as placeholders; staff confirmed MBIT had submitted an increased request of over 7% that was not yet reflected in the presented figures. Another board member asked for a detailed breakdown of the “Other” expense category before the next budget meeting; staff said they would provide that breakdown in the weekly update and include it in the February 27 and February 20 committee work sessions.

The presenter emphasized the role of one‑time vs. ongoing funding, saying the previously used $2.9 million savings transfer was an “artificial” plug and not sustainable. Board discussion noted special‑education costs continue to increase and that the modest state increase (about $95,000 cited for special education) does not offset per‑student outplacement costs.

The board did not take a final budget vote at the meeting; financial approvals on bills and cash reports later on the agenda were approved separately. Administrators said they will return with more detailed line‑item data and alternatives for reducing expenditures or increasing revenue ahead of the 2025–26 preliminary budget.