The Shaler Area School Board reviewed its 2024-25 and 2025-26 fiscal years and looked ahead to budgeting for 2026-27 during its finance committee meeting last month.
For the 2025-26 fiscal year, Shaler Area saw a decrease in real estate tax revenue due to a reduction in assessment values and no millage increase. Revenues are expected to come in about $2.5 million lower than total expenses.
“Local revenues are still the largest piece of the pie,” said Kimberly Pawlishak, the district’s director of finance and operations. “Local revenues remain Shaler Area School District’s primary funding source. Current real estate collections have declined due to a flat millage rate and reduced assessment values. Delinquent tax revenue decreased and prior-year refunds have decreased compared to the prior year.”
State revenues increased slightly over the prior year. The increase is based on the Planning and Construction workbook (PlanCon) reimbursement program, which is tied to the district’s increased debt service expenditure. PlanCon is a set of forms and procedures used to apply for reimbursement for school construction projects.
“State subsidy allocations are trending down based on the district’s local effort metrics. None of that state increase in revenues is related to subsidies,” Pawlishak said.
Federal revenues are back to pre-pandemic levels.
Personnel costs increased based on structured agreements in place. The total percentage of personnel expenditures in the budget remains the same as the prior year.
Debt service is becoming a larger piece of the budget than in previous years. Payments are based on debt service schedules. Debt service expenditures made up 8.9% of the budget in the 2025-26 fiscal year.
Tuition costs decreased based on anticipated updates to the tuition rate calculation. There is a projected reduction of over $1 million at the time of the budget compared to actual 2024-25 tuition costs.
Since there was no revenue added into the 2025-26 budget, the budget was passed anticipating a drawdown from the fund balance.
Expenses are increasing at a steady trend, 2.3% per year on average. In 2023-24 and 2024-25, revenues outpaced expenditures. This was due, in large part, to an increase in tax revenues because of millage increases each year coupled with minimal assessment value changes. The district also was able to capture savings in personnel.
“We might have one-off expenses in one year, but it is being properly managed throughout the rest of the budget,” Pawlishak said.
In 2025-26, expenditures are budgeted to outpace revenues. A loss in tax revenue is expected due to no change in the millage rate and a decrease in assessment values. Personnel costs also are expected to increase because of retirement and insurance premiums. Debt service obligation increased by almost $3 million.
“There is no consistency in our revenue stream. It’s not a steady increase; it’s not a steady decrease. It’s kind of, you know, up and down,” Pawlishak said. “Now is the time to look strategically, see what can be done with our revenues to get a consistent base so that our revenues are being managed consistently to keep up with increases on the expenditure side.”
Looking ahead to the 2026-27 budget, some known budgetary matters already are being considered.
The Act 1 index is 4.2% for the district. The Act 1 index is used to determine the maximum tax increases for each tax the school district levies without Pennsylvania Department of Education exception or voter approval. The base index is calculated by averaging the percent increases in the statewide average weekly wage and the federal employment cost index for elementary/secondary schools.
January 2026 certified assessment values showed a slight increase. The assessment value shows an increase of approximately 0.44%, a potential revenue increase of about $240,000 that could potentially be added into the budget for 2026-27.
Debt services expenses are expected to come in at $9.3 million, which already is known because of the payment schedule structure.
Budgetary factors that remain up in the air include: medical premium increases, homestead exemption and property tax relief allocations from the county/state, state budgetary allocations and appropriations to the education from the state budget, and the stability or instability of federal revenue streams.
The proposed final budget for the 2026-27 fiscal year is set for approval at the May 20 finance committee meeting ahead of the Pennsylvania Department of Education’s deadline of May 30. The final budget is expected to be adopted June 17.