Lower Moreland board approves 2025-26 expenditure budget; long-term tax gap remains

The Lower Moreland Board of School Directors on April 22 approved the 2025-26 expenditure budget for public display under PennsylvaniaAct 1, a step the district must take before finalizing tax actions.

Board President Dr. James Lee opened the discussion and noted the vote would only put the proposed expenditure budget on public display, not set any tax rate. "We are only approving the expenditure budget as we sit today. This is not approving a tax increase," district staff told the board during the presentation.

The vote followed an extended review by district finance staff of a budget gap the presentation identified as "a little over $3,000,000." District staff told the board they had applied for a special-education exception valued at about $930,000. With that exception applied, staff said the effective tax rate needed to fully balance the budget would be about 6.97 percent; using the full exception would lower the maximum possible rate to about 6.05 percent. The board and staff repeatedly emphasized the display approval is a procedural step in the Act 1 process and not a final tax decision.

Why it matters: the discussion laid out the district's options for addressing the shortfall and the limits on local authority. District staff said the primary drivers of the shortfall are personnel-related costs (salaries and benefits), increases in healthcare, higher behavioral-services and out-of-district tuition costs, and transportation and fuel costs. Staff also pointed to volatility in transfer-tax and interest-income receipts as material to the final projections.

District staff told the board they have identified approximately $765,000 in fund-balance uses and other adjustments in the current plan and that additional revenue and cuts are being evaluated. "We will need to either utilize more fund balance or look to cut programs," staff said when asked about alternatives once the referendum deadline passed.

Multiple board members pressed for clarity about timing and options. Mr. McQueen (district finance staff) walked the board through the worksheets showing the shortfall and adjustments; he told members the district still had April, May and June collections to update revenue lines before the June legislative meeting, and that the administration expected to present options including varying levels of fund-balance use and program cuts at upcoming work sessions.

Standard & Poor's bond rating was raised in the discussion as context: staff said the districtwas recently re-rated and that lower fund balances can negatively affect ratings. Staff estimated that, under current assumptions and without any tax increase, the district would end the year with an approximate $2.0 million ending fund balance and that using the planned $765,000 would leave roughly $1.3 million available going forward.

Next steps: staff said the expenditure budget will be posted and on display for at least 30 days as required by Act 1, with additional budget work and public discussions scheduled for May and June. A final tax proposal and any decision about a tax increase would return to the board at the June legislative meeting.

Board action: A motion to approve the 2025-26 expenditure budget as presented passed by voice vote.

Ending: The board approved the display of the budget but did not adopt a tax rate. Staff will present updated revenue estimates and options to close the remaining gap at the district's May and June meetings before the board makes any final tax decision.