Souderton presents preliminary budget and seeks flexibility to apply for Act 1 exceptions

Mister Taylor reviewed the district’s preliminary budget outlook and explained why the board should approve a preliminary budget next week: approval is required to apply for Act 1 exceptions that can allow a district to raise taxes beyond the statutory index for qualifying special circumstances (special education costs, certain pension drivers). He said the Act 1 index for 2026–27 is set at 3.5 percent and that the district’s preliminary deficit is presented to make the district eligible to seek exceptions if needed.

Taylor noted the district’s recent bond issuance produced approximately $350,000 in lower debt-service costs vs. prior estimates and a separate PDE recalculation of cyber-charter and special-education tuition (PDE 363) is projected to reduce charter tuition liabilities by about $350,000 annually; those two items together lower the budget gap by roughly $700,000 relative to the preliminary presentation. Still, primary cost drivers remain salary and benefit increases (about $3 million in salary increases and $2.6 million in benefits growth in the preliminary figures) and special-education costs, prompting the administration to seek flexibility through exceptions in case expenditure trends persist.

The committee reviewed revenue assumptions (conservative estimates for earned-income and transfer taxes, flat state and federal funding for now) and asked for later deeper dives into fund balance legal limits and the administration’s exceptions calculations. Administration said it will provide exception calculations and any approvals (expected in March) and noted the board’s final vote on the budget remains in June.