Chester-Upland preliminary budget shows deficit; district posts proposed millage increase to narrow gap

Chester-Upland School District officials presented a preliminary 2025–26 budget at the receivers advisory council meeting on May 22, saying the district faces a multi‑million dollar shortfall and has posted a proposed millage increase to help cover the gap.

The presentation by Miss Gathers, the district finance presenter, said projected revenues for the coming fiscal year are about $172.9 million against expenses of roughly $174.5 million, leaving a preliminary shortfall of about $1.58 million after applying the maximum local millage increase shown on the slides. Earlier in the presentation presenters described larger shortfalls under different assumptions: a $2.8 million operating shortfall and, once the district’s 86% collection ratio is accounted for, an effective billed shortfall of about $3.1 million.

The budget matters because Chester‑Upland relies heavily on state funding and has limited taxable property in Chester city, officials said. Receiver Nichols and staff said the district is constrained by a tax‑index cap set by the Pennsylvania Department of Education (PDE) and by a high share of tax‑exempt properties in the city.

District officials outlined the major drivers of the shortfall. The loss of tax revenue after Crozer Medical Center reduced or stopped payments was cited as a roughly $2.2 million hit. The end of one charter school’s discounted reimbursement agreement and higher charter reimbursements overall were described as a major budget pressure: presenters said charter costs now consume roughly 40% of the district’s operating budget and that charter expenditures increased about 16% compared with the prior year. Officials also cited the end of ESSER federal funds that previously supported curriculum, technology and capital investments; rising health‑insurance premiums (a reported 7% increase, described as nearly $4 million); a 15% rise in property and casualty insurance; and general inflation in utilities and supplies.

Miss Gathers explained how millage is calculated and displayed the maximum millage amounts on the slides: the presentation listed a maximum allowable millage of about 15.2753 mills for Chester city and about 14.2862 mills for the borough/township under the scenarios shown. The presenters also referenced a district‑level index number (described in the meeting as a PDE index) said to limit year‑to‑year increases. Public speakers asked that the posted budget language for the agenda be amended to indicate the district would consider “up to a 6.3 millage rate” while officials continue to pursue internal reductions and track state funding decisions.

Officials said the district is relying on conservative state funding scenarios while it waits for final state appropriation language. The finance presentation included revenue breakdowns showing roughly 66% of revenue from the state, about 11% from local real estate, and the remainder from federal and other sources; the presenters said Title I–IV and other federal grants account for the bulk of federal funds and that “Ready to Learn” and similar grants are included in federal revenue assumptions.

Receiver Nichols and staff said the preliminary budget is subject to revision before final adoption, and they noted the district must post the preliminary budget and hold a public hearing before a final adoption date (the district referenced a June adoption timeline). In the meeting the receiver said there is a possibility of a special meeting prior to the June adoption if state funding or other variables require adjustments.

Votes at a glance

- Minutes from the April 24 meeting: approved. (No mover/second recorded in the transcript.) - Education agenda items A1–A12: approved. (No mover/second recorded in the transcript.) - Personnel item B1: approved. (No mover/second recorded in the transcript.) - Business agenda items C1–C16: approved with a noted correction to item C16 indicating the posted millage language would say “up to a 6.3 millage rate.” (No mover/second recorded in the transcript.)

District next steps and public input

Officials said they will continue to revise figures as state budget numbers become firmer and as the district seeks internal reductions. Staff repeatedly emphasized the preliminary nature of the posted budget and encouraged the public to review the posted documents and attend the public hearing before the final adoption.

The receiver and staff also asked the public to be mindful of the district’s limited local tax base—slides and remarks noted more than half of Chester city property is tax‑exempt—and to consider the collection ratio (the district said it collects about 86% of billed local revenue) when evaluating revenue needs.

Ending

District officials said the objective is to minimize any tax increase while maintaining fiscal responsibility and complying with the court‑approved recovery plan. They said further budget work and public hearings will occur before a final adoption in June.