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Montoursville Area SD budget shows $836,028 shortfall; administrator recommends 3% millage increase
Summary
District administrators told the school board that rising wages and a 9.9% health-insurance spike leave a projected $836,028 shortfall for 2026–27 and recommended a 3% millage increase; board members debated using fund balance, limiting the increase, and protecting staff and services.
An administrator identified in the meeting as Jess presented the Montoursville Area School District’s proposed 2026–27 budget on May 5, saying the district faces a projected shortfall of $836,028 after accounting for a listed adjustment of $467,500.
Jess said local revenue represents 52.1% of total revenue, state revenue 46.9% and federal revenue roughly 1%. She told the board wages and benefits account for 65.2% of expenditures and singled out a 9.9% increase in health-insurance costs as a major driver of the shortfall. "You're looking at a deficit of $1.3 million; when I figure in that $467,500, we're actually at a deficit of 836,028," Jess said during the presentation.
The presentation included modeled millage-change scenarios and household impacts: the district estimated that a 1% millage increase would add about $23 to the average homestead tax bill based on a $121,000 assessed value; a 3% increase would add about $68. Jess recommended a 3% increase (moving the millage to about 17.65 mills) as a manageable option to reduce the deficit while maintaining services.
Board members asked detailed budget questions about delinquent-real-estate-tax assumptions (budgeted delinquent collections rose to about $550,000), categories of large "300-series" professional-service expenses (noted as mainly IU and special-education placements), and transportation contract costs. The presenter said some outside placements, IU services and contracted transportation account for large fluctuations in the 300s and 1200s budget lines.
Members debated whether to draw on the district’s audited 2025–26 fund balance ($4.9 million, including $4.5 million unassigned) or to seek a millage increase. One board member said protecting services and staff was paramount and favored a small increase plus targeted use of fund balance; another urged caution about reducing the fund balance below the 8% unassigned threshold discussed in the school code. Board discussion cited a possible $1.5 million commit to shelter health-care costs as a strategy for future years.
Jess noted timeline and next steps: the board must approve a proposed final budget on May 12 and adopt the final budget on June 9. No formal vote on a millage change was taken at the May 5 meeting.
What happens next: board members asked administration to return on May 12 with refined options reflecting the board’s direction on how much, if any, to request in millage and how much to commit from fund balance.
