Athens Area SD approves preliminary 2026–27 budget as business manager warns of $1.52M shortfall, recommends tax increase

The Athens Area School District board on Thursday approved a preliminary 2026–27 budget that the district’s business manager said still projects a $1,520,037 operating loss and will leave limited reserves unless the board acts.

Tracy Gilland, the district’s school business manager, told the board the district faces structural pressures driven by the end of one-time federal ESSER funding, rising health-insurance costs and higher cyber-charter expenses. “It wasn’t once I closed the books like coming here, I knew of the budgeted loss,” Gilland said, explaining a full review and a shift to zero-based budgeting to identify savings.

Gilland presented consolidated revenues of $47,157,885 for 2026–27, noting state revenue accounts for about 55% of that total and local revenues about 43%. She said adopting the Act 1 index (5.1%) would yield roughly $820,000 in local revenue and recommended the board consider the full index or some fraction of it to maintain an acceptable fund balance.

The business manager laid out expense drivers that include a 13% increase in health insurance, contractual salary increases, and a history of rising cyber-charter costs (from about $789,000 in 2021 to roughly $1.1–1.4 million in recent years). On staffing, Gilland said the district is avoiding furloughs and will rely on attrition where possible; she noted six teaching retirements and elimination of four part-time paraprofessional positions (with efforts to offer alternative roles to affected employees).

Board members pressed for context on reserves and debt. Gilland said Pennsylvania does not issue a single statewide fund-balance percentage, but noted 8% unreserved is a commonly referenced figure; she recommended five to six months of operating reserves and estimated that would be about $7 million for Athens. She also said a roughly $3.7 million debt will be paid off around 2031.

After the presentation and a period of questions, the board moved and carried a vote to approve the preliminary budget; the vote will be followed by a 30-day public display period required by law and a final adoption vote scheduled for June 16. The preliminary approval does not finalize any tax increase — rather, it allows the budget to be posted for public inspection while the board continues to refine numbers and consider whether to adopt an Act 1 index increase at final vote.

The board will consider final assessed values from the county, any state budget movement, special-education funding updates and open-enrollment results before the June adoption vote. “I do recommend that we approve to increase taxes, to the index based on really everything that I presented tonight,” Gilland told the board during her presentation.