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Southern York County SD finance committee flags $760,000 shortfall for 2026–27 budget
Summary
Committee presenters said expenditures are projected to rise about 3.8% while revenues remain nearly flat, leaving an illustrative $760,000 gap after applying board fund‑balance rules and a 4.4% PDE index tax increase; board will consider a December resolution to stay within the index.
The Southern York County School District finance and budget committee reviewed early projections for the 2026–27 budget and reported an illustrative remaining shortfall of about $760,000 after planned use of fund balance and a 4.4% tax increase.
Sue, presenting preliminary figures, said district expenditures are projected to increase roughly 3.8% while revenues show little growth, producing a large financing gap under current assumptions. "If we go to the index of 4.4% for a tax increase, [that] yields about a million and a half dollars, leaving a remaining shortfall of $760,000," she said.
The presenters emphasized that the numbers are early and subject to change as state budget items are finalized. Trevor outlined recent history: 2024–25 operations showed a modest surplus after removing one‑time capital transfers, but 2025–26 projections show revenue down by about $213,000 and expenditures roughly $1.3 million under budget mainly because of deliberate unfilled positions.
Revenue composition is a key concern. Presenters said about 64% of district revenue comes from local sources, primarily real estate taxes, and that growth in assessments has been very low in recent years. Sue warned that increasing exemptions and appeals, plus slowing assessment growth, limit the district's ability to raise local revenue. She illustrated that a $6 million assessment change generated only about $114,000 in net tax revenue in a recent year.
Earned income tax — the district's second largest local revenue source — has flattened and even declined in 2024–25, the committee was told. Sue suggested demographic shifts (for example, an increase in retirees) could lower earned income tax receipts but framed that as a hypothesis, not a confirmed cause.
Because the district's investable balances are projected to decline (from about $30 million to an estimated $16.5 million over two years), interest earnings that previously helped the budget are also falling. "I think that reliance on that much fund balance is is not prudent," Sue said, arguing the board needs a plan to reduce dependence on reserves.
The committee reviewed illustrative options for closing gaps. A 4.4% increase in millage (the PDE index) would generate roughly $1.5 million; using the district's fund‑balance formula (3% of expenditures and 1% of revenues) would still leave a multi‑hundred‑thousand‑dollar deficit unless cuts are made. Sue showed an example package of reductions that would include five professional positions, two support positions, an additional bus (after a recent bus removal), and a 5% reduction to building budgets, which in the illustration produced roughly $786,000 in savings.
Presenters identified next steps and timing: the administration will bring a resolution to the full board in December asking to stay within the Pennsylvania Department of Education (PDE) index of 4.4% and will return to the board in January with a recommendation on meal prices tied to the Chartwells renewal process.
The committee did not take a binding vote on the substantive budget items at this meeting; it adjourned after concluding the presentation.
The board is scheduled to consider the December resolution and the medical/insurance rate approvals later this winter; additional updates and the state's finalized formulas could alter the numbers presented tonight.
