Colonial SD finance committee flags $3.8M hole in first look at 2026-27 budget

Finance staff presented a first look at the Colonial School District's 2026-27 budget on Jan. 12 and outlined revenue projections, cost drivers and planning options.

The finance director said the district projects roughly $165 million in revenues and about $168.9 million in expenditures, producing a shortfall of about $3.8 million. Administration framed three primary ways to close the gap: enact the Pennsylvania base-index cap of 3.5% (which would raise the millage from 26.495 to about 27.422), use a portion of available fund balance (the general fund unassigned balance was reported at about $12.4 million), or adopt a mix of tax and fund-balance strategies. Staff said no decision is expected at this meeting; the board will revisit a proposed budget in April and a final budget by the June meeting cycle, consistent with Pennsylvania Department of Education timelines.

Key revenue items included a projected $2.6 million local increase, driven mainly by earned-income tax growth ($900,000 projected increase) and real-estate taxes; state and federal revenues were forecast largely flat, with a modest state grant (a $200,000 mental-health/security grant expected to be earmarked for special education). On the expense side, contractually required wage and benefit increases (bargaining units and expected retirements), and rapidly rising special-education support costs (notably increases in 1:1 aides) were cited as major cost drivers. Administration reported several retirements and estimated attrition savings for replacements but cautioned that special-education obligations are a major structural pressure.

Finance staff also previewed capital-funding considerations: existing capital reserves and projects include the current roofing program and other deferred-maintenance items (turf fields, HVAC, carpet). The director said the capital projects fund had fluctuated annually and emphasized the need for a five-year capital plan; a presentation on a five-year capital improvement schedule will be provided to the committee in February.

Board members asked about potential development impacts to assessed value (mall sale, steel mill transactions) and the timing of student-growth-driven staffing needs; administration said the district monitors assessed values monthly and will produce staffing and enrollment detail in upcoming budget meetings. The finance committee will hold series of budget meetings over the next months with a recommendation expected in April.