Board hears 2026–27 budget-development briefing; Act 1 index, tax appeals and federal shutdown flagged as risks

Bill Stone, director of business affairs for the Hatboro-Horsham School District, presented the first 2026–27 general fund budget development briefing to the board on Oct. 27, 2025, and said the district's process begins in the fall to meet statutory timelines. "I am proud to present the first of the 2026, 2027 general fund budget development presentations. It is hard to believe that we're only about 6 weeks into the school year, and here we are talking about next school year's budget already," Stone said.

Stone reviewed key fiscal context: the district's long-term strategy of keeping any real-estate tax increase at or below the Act 1 index (Act 1 of 2006), a certified Act 1 index of 3.5% for fiscal 2026–27 (down from 4% in the previous year), revenue composition (roughly 76% local revenue; about 25% state and federal), and expenditures (salaries and benefits about 70% of the general fund). He noted the district's triple-A rating from Moody's and that prior facility financing supported large capital projects.

Stone warned of two near-term risks to projected revenue: a spike in commercial property tax assessment appeals this calendar year, which could shrink the tax base if appeals are granted, and unresolved state and federal budget processes. On federal funding he noted the district receives roughly $700,000 in impact aid tied to a large federally owned parcel (the former Willow Grove Naval Air Station) that does not pay local property taxes; Stone said the impact aid program had staff furloughed during the federal shutdown, though he had no indication the funding would be eliminated when the program resumes.

Board members asked whether there was any definitive statewide timeline for a state budget and whether the district plans to prepare alternate budgets with and without anticipated state or federal funding. Stone said there was no definitive date from statewide organizations and that the district typically budgets conservatively, flat-funding at current-year levels when revenue is uncertain. He said the more immediate concern would be cash-flow issues if the impasse extends several months. The superintendent added that county superintendents are monitoring districts already experiencing fiscal strain.

Stone identified additional budget variables: the district is entering teacher contract negotiations for a contract that expires June 30, 2026, which makes personnel costs an important uncertainty, and long-term facilities needs (including older buildings noted for future projects) will require multi-year financial and facilities planning. He said the administration will bring a recommendation in December to certify that the board will not increase real-estate taxes above the Act 1 index (an Act 1 opt-out resolution will be recommended in December), and the budget timeline will continue with proposed, final and adopted budgets in April and June respectively.

Speakers quoted in this article are drawn from remarks made during the Oct. 27, 2025 legislative action meeting of the Hatboro-Horsham School District Board of School Directors.