Scranton officials warn of multi‑year budget shortfalls as special‑education enrollment rises

Ian Tyson, a director on the Department of Education technical assistance team, told Scranton School District trustees the district’s multi‑year financial projections show a growing structural gap unless assumptions change.

Tyson said the baseline projection holds the local real‑estate mill rate flat, assumes declines in assessed value and no additional state adequacy or tax‑equity funds beyond 2025‑26. "Stability," he said, is the metric the analysis is built around. He warned that "by year four, 2030, the district would have a negative fund balance if nothing else changed." The baseline shows a roughly $4.5 million shortfall in 2027 that grows annually under the same assumptions.

The presentation included scenario modelling: one year of the governor’s proposed adequacy and tax‑equity funds produces a short‑term positive swing (about $5 million) but deficits resume later; two additional years of state adequacy funding materially delay deficits and preserve a larger fund balance into 2029–31. PFM’s illustrative calculations show local tax increases in the range of a multi‑percent annual adjustment would be needed to permanently close the gap under the baseline; staff cited an illustrative 4.65% annual increase starting in 2027 as an example to restore balance under that scenario.

District staff also highlighted operational pressures tied to rising special‑education needs. Presenters reported that special‑education enrollment rose from roughly 2,000 pre‑pandemic to about 2,400 in 2024‑25, pushing the special‑education share of total enrollment from about 21% to nearly 26%. Staff said special‑education costs grew faster than the general budget over recent years (presented figures showed ~9.6% annualized growth for total special‑education costs and ~15.9% for autistic‑support costs in the period reviewed). The district’s direct special‑education budget now is roughly $51 million per year; presenters said local revenue covers about $36 million (roughly 70%) of that total and the district’s 2026 budget assumed roughly $10.8 million in special‑education state funding.

Officials described immediate operational consequences: the district reported current total enrollment around 9,356 and forecasted the opening of 11–12 additional special‑education classrooms for the coming school year (autistic support, emotional support and life‑skills classrooms). Staff warned those expansions will strain available classroom space even with planned additions and urged advocacy for timely state funding.

PFM also presented capital figures from the district’s feasibility work, noting an estimated $426 million in necessary capital improvements without tied funding sources and that inflation likely increased that figure since the study. Presenters said large facility projects commonly require bonds or loans and that the district has limited local levers beyond tax‑rate decisions to meet those capital needs.

What happens next: trustees and staff said they will continue advocacy with state legislators for additional adequacy funding, monitor enrollment and cost trends, and consider local budget options and timing. The PFM slide decks and the district’s fair‑funding materials will be posted to BoardDocs for public review.