Scranton School District sees short-term surpluses but long-term gaps; board weighs taxes, borrowing and a strategic plan

PFM, the district’s technical‑assistance team, told the Scranton School District Budget & Finance Committee on Sept. 23 that the district’s amended 2024 budget and the Commonwealth’s 2024–25 state budget produce positive operating results through 2027 but that structural shortfalls emerge thereafter unless the district receives additional state supplements or raises local taxes.

“My name is Ian Tyson. I’m a director of public financial management,” Ian Tyson said while introducing the presentation and PFM’s role supporting the district’s recovery implementation. PFM’s baseline projections use the district’s adopted 2024 budget with updated growth assumptions, the presenters said.

PFM analyst Hannah said state revenues now drive more than half of district funding and that salaries and benefits make up “over, 60% of the district's funding.” She told the board the projection model included recent increases in several line items, new ready‑to‑learn block‑grant supplements and an assumption that ESSER federal pandemic relief funds expire and are not available in projection years.

PFM walked the board through “what‑if” scenarios that showed two feasible ways to avoid medium‑term deficits: the legislature repeats the ready‑to‑learn adequacy and tax‑equity supplements next year or the district implements modest annual tax increases. Under one scenario, receiving a second year of the $9.2 million supplement would keep results balanced; absent that, PFM said the district would need about 2.6% annual tax increases beginning in 2026 to achieve similar results. A more ambitious investment package the consultants modeled — restoring the intermediate schedule (12 teachers phased in), adding 3 autistic‑support classrooms, more instructional and behavioral staff and a $60 million capital borrowing program (split $30M in 2025 and $30M in 2027) — would require roughly a 3.3% annual tax increase plus another year of state supplements to balance by 2030.

PFM also flagged several local revenue and cost drivers: charter‑school tuition (PFM noted roughly 1,000 students enrolled in charter schools in 2024–25, most in cyber charters, and assumed about 30 new charter students per year), a projected recurring $1.9 million revenue decline tied to the sale of Commonwealth Health hospitals, and ongoing growth in wages, benefits and special‑education costs. PFM recommended closely tracking those items while engaging local legislators on state funding.

District staff presented a preliminary budget overview and fund‑balance options. Pat said the district projects an unassigned/available fund balance of roughly $26 million (about 12.4% of the 2024 expenditure budget), well above the 5% policy minimum. Pat recommended considering targeted commitments of fund balance — for capital projects or other one‑time uses — and noted the district is evaluating debt refunding (PFM estimated a potential ~$1 million savings on outstanding bonds) and other procurement steps to control costs.

Administrators described ongoing procurement and efficiency work: an RFP for health‑care consulting, an RFQ for underwriting services tied to potential borrowing, and cross‑department reviews to identify recurring savings. On the state tax‑equity supplement (about $793,000 for Scranton), Pat said the Pennsylvania Department of Education (PDE) advised districts that some supplements require a board resolution to accept the funds and might be treated as deferred revenue for the following fiscal year; Pat said staff will meet PDE to confirm timing so the board avoids a budgeting hole.

Board members repeatedly asked for clarity on which items are included in the baseline versus modeled scenarios. One director noted that several of the investments PFM modeled are already in the district’s implementation plans (for example, restored middle‑school scheduling and autistic‑support staffing) and emphasized those commitments should inform budget choices. Directors also pressed administration to identify which investments can be deferred, where operating efficiencies can be found, and how recommendations align with the annual Act 1 timeline for budget adoption.

The meeting included a proposal to pursue a three‑year strategic plan to align the amended recovery plan, the feasibility study work and the district’s comprehensive plan. A presenter from the intermediate unit described a low‑cost ($10,000) strategic‑planning offer involving stakeholder engagement, measurable SMART goals, a steering committee and year‑by‑year cost estimates. Board members debated overlap with the recovery and feasibility work and emphasized that any consultant work should have clear board buy‑in and measurable outcomes.

The committee did not take formal roll‑call votes on budget policies that night. Director Gilmartin closed the meeting with procedural next steps and a motion to adjourn.

What’s next: staff will follow up with PDE on the tax‑equity supplement timing, continue procurement work (health‑care consultant, underwriting RFQ), refine the 2025 budget workstreams and bring additional detail on which investments are considered baseline commitments versus optional scenarios.