District finance briefing: Shippensburg's Act 1 adjusted index projected at 4.7% for FY26–27; state funding still pending

Mr. Barwin reviewed the components of the Pennsylvania Act 1 index and reported the district's calculated adjusted index of 4.7% for fiscal year 2026–27, using a market value/personal income aid ratio of approximately 0.5932. He showed the state base index history and an example calculation, explaining that districts with aid ratios above 0.4 have an upward adjustment applied to the state base rate.

Board members asked about the revenue implications if the index drops; staff estimated that reducing the allowable increase from 4.7% to about 2.7% could reduce potential additional revenue by around $1 million to $1.5 million (sample estimate provided during discussion). The district's 2025–26 budget was presented as roughly $72.2 million with an outstanding, unreleased portion of state subsidy money; staff said they were still waiting for roughly $2.8 million in prior‑year state funding and an additional roughly $5.2 million for the current year that would normally have been received by October in a typical year. The delay reduces interest income and cash flow.

Mr. Barwin also gave a brief overview of the technology budget (approximately $845,000) and noted many software and cybersecurity costs sit there; device replacement purchases are typically funded from fund balance and returned to the board for approval when needed.

Why it matters: The Act 1 index sets a locally controllable ceiling for property tax increases without voter referendum and influences decisions about staffing, borrowing capacity and program funding. Board members discussed demographic growth in the district, pressure from health care costs, and how the index trajectory constrains levers available to the board.

No tax rate decision was made at the meeting; board members noted the index and other state budget uncertainty will inform spring budget deliberations.