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PFM updates five‑year projections, warns shortfalls could return without state supplements or tax action
Summary
PFM consultants told the Harrisburg board the district’s status‑quo projection based on the proposed 2026‑27 budget shows two years of positive results followed by shortfalls beginning 2029‑30; scenario analysis shows one additional year of state adequacy supplements would only delay shortfalls, while five years could restore multi‑year balance.
Consultants from PFM presented updated multi‑year financial projections to the Harrisburg City School District board on June 9, and said assumptions in the new model — based on the proposed 2026‑27 budget — change the picture from prior year analyses.
Brianna, a senior managing consultant with PFM, told the board the district’s proposed 2026‑27 budget is about $227.7 million and that the baseline (status‑quo) projection assumes current operations continue with no corrective actions. Under that baseline, the district would show positive net operating results in 2027‑28 and 2028‑29 but begin to face shortfalls in 2029‑30 that grow in subsequent years.
PFM stressed several drivers: state funding makes up a large share of total revenues (the presentation showed roughly two‑thirds of revenues from state sources), charter school tuition is a large and growing expenditure, and personnel costs — roughly half the budget — are sensitive to collective bargaining outcomes. PFM highlighted specific cost pressures: charter enrollment has grown from roughly 1,000 pre‑pandemic to about 1,600 by 2025‑26; the district added eight autism support classrooms recently and another eight would cost an estimated $3.3 million across projection years.
The consultants presented two scenarios tied to the state’s adequacy and tax equity supplements. A one‑year supplement in 2027‑28 would add about $8.2 million and push the first shortfall out one year (and reduce its size); five additional years of supplements would add about $73 million cumulatively and allow the district to balance long‑term without annual tax increases. PFM cautioned that those supplements are controlled by the legislature and are not guaranteed.
PFM also quantified “what it would take” to balance via local tax increases: under one display, a 3.7% annual tax increase beginning in 2026‑27 would be needed to balance projections; other permutations showed a roughly 3.8% annual increase if the board keeps a 3% increase in 2026‑27. Under the scenario with one additional year of state supplements, PFM presented a lower required annual increase of about 2.1%, or slightly under 2% if a 3% increase is kept in 2026‑27.
Board members asked for comparisons to the district’s internal models, questioned assumptions (assessed value declines, charter enrollment growth, assumed salary/benefit escalation), and sought clarity on the Act 1 index (a statutory cap on allowable tax increases rather than a required increase). The administration said it will produce updated budget materials for board review the week of June 16, with a public budget discussion planned June 23 and a vote scheduled June 30.
PFM’s update replaced older exit‑report assumptions and showed how different inputs can materially change the recommended tax path and the mix of cuts vs. revenue increases the district may consider.
