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Work session review: Littlestown Area SD budget history shows revenue anomalies driven by EIT and investment earnings
Summary
Staff presented historical budget vs. actual data from 2015–2024, attributing recent surpluses to higher earned income tax receipts and a spike in investment earnings after rapid federal rate increases; stimulus funds have been closed out and the AFR/audit timeline was outlined.
At the work session, Speaker 1 presented historical revenue and expenditure charts for the district covering 2015–2024, explaining the blue line (budget) and red line (actual). Speaker 1 said the district usually hovered around a 2–3% budget-to-actual gap until the anomalies of 2023 and 2024.
Speaker 1 described the earned income tax (EIT) as "the big, tipping point" for tax revenues, noting that local wages drive EIT receipts: "And earned income tax flows off of local wages. We can't control local wages." The presentation also highlighted unusually strong investment earnings after the Federal Reserve raised interest rates rapidly, producing revenue gains the district had not anticipated.
Staff provided several specific figures cited in the discussion: an $8,700 item mentioned in one account and an aggregated $1,700,000 variance across five accounts over the past two years. Speaker 1 said the district budgets using three years of actuals plus year-to-date figures to set estimates, and that out-of-trend items can create the observed surpluses.
On federal stimulus funds, Speaker 1 said the district had used and closed out those accounts. Regarding process and schedule, Speaker 1 said the AFR/audit should be available for a January work session with a brief presentation, and February will bring the first formal look at the coming year's budget.
No formal board votes occurred during the presentation segment; staff provided context and explained transfer protocols used when expense accounts need adjustment.
