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PFM warns Scranton SD budget may face shortfalls after 2026 as special‑education costs rise
Summary
PFM consultants presented five‑year financial projections showing a balanced 2026 budget but rising special‑education enrollment and state‑funding uncertainty that could produce operating shortfalls after 2026 and require tax increases or cuts.
PFM consultants presented the Scranton School District with multi‑year budget projections, telling the board the district’s 2026 budget appears balanced but that longer‑term scenarios show possible operating shortfalls if additional state aid or expense reductions do not materialize.
The firm said baseline assumptions include modest line‑item growth (about 2.5%) and an assumed post‑contract growth rate for teachers of roughly 2.2%. Presenters noted changes in state funding under the Commonwealth’s enacted 2026 budget and said increased state supplements can materially improve the district’s outlook.
PFM highlighted rising special‑education enrollment as a primary cost driver. The consultants said total district enrollment has stabilized at about 9,300 students while the share of students with Individualized Education Programs (IEPs) has climbed past 20 percent and is approaching 25 percent in the most recent data. That trend, PFM said, increases staffing, space and program costs because many special‑education placements require lower allowable class sizes and additional support services.
The presentation included scenario analysis: under one plausible scenario the district begins to see negative operating results after 2026; another scenario that assumes additional grant supplements nearly balances the five‑year projection. PFM advised the board that options to address potential gaps include phased investments, expense reductions, or targeted tax increases.
Board members discussed local revenue and savings ideas alongside continued state advocacy. A board member urged continued legal and political advocacy around the ongoing Fair Funding settlement, saying the effort to secure multiple years of compounded remedy funding must continue. Directors also asked staff to keep tracking the county’s certified assessed‑value numbers, which will affect millage calculations and the district’s revenue neutrality calculations for 2026.
The presentation led the board to request more detail on labor contract timing (teachers, paraprofessionals, Act 93 administrators and support staff) and on facility implications tied to special‑education growth. PFM and district staff will return with follow‑up materials before the board votes on the 2026 final general fund budget.
