Freeport Area School District in a familiar place as it faces deficit

The Freeport Area School District is looking to close a shortfall of about $880,000 in its proposed budget.

Barring cuts or unexpected changes, the district will dip into its fund balance to bridge the gap for the sixth time in seven years.

Just how much it’ll deplete its $2.8 million in unassigned reserves could fluctuate ahead of a final vote on June 12 for a few reasons.

For one, the draft spending plan does not account for $451,000 included in Gov. Josh Shapiro’s proposed state budget. Shapiro is calling for an $872 million statewide investment to lessen disparities in per-pupil spending across districts.

But pricier health insurance for teachers will offset part of the expected aid, according to Brad Walker, Freeport Area director of finance and operations.

Health insurance costs will jump about 15%, up from the expected 11% factored into the proposed budget, meaning the district will pay $490,000 more toward premiums than it did last year.

“We were told all year it was closer to 10%,” Walker said. “This is the highest percent increase in medical premiums I’ve seen in my time as a school business administrator.”

School board President Gary Risch Jr. said Freeport Area’s fund balance will remain in a range that allows for bond issues through at least next school year. The balance includes another $3 million in funds set aside for specific uses.

Between stagnant enrollment and the need for, at minimum, renovations to aging Freeport Area High School, there’s no indication the fund balance will grow in the coming years.

“We hope to add to the fund balance moving forward,” Walker said. “Our projections do not show that.”

Freeport Area pulled $340,000 in reserves to balance its budget for this school year, even after a real estate tax hike.

Rates went up 3% in the district’s Armstrong County communities of Freeport and South Buffalo, and 2.85% in Buffalo Township, Butler County.

Administrators are recommending another tax increase, Walker said.

Risch said he could not speculate on whether another increase will be needed this year, but he did point to perceived unfairness in the state tax equalization process.

Each year, the State Tax Equalization Board adjusts the tax burden in Pennsylvania’s approximately 90 multi-county districts to reflect the market value of taxable property. This process rebalances how much revenue each county contributes, but does not impact the total received by a district.

Buffalo Township shoulders about 73% of the tax burden for Freeport Area, compared to 27% between South Buffalo and Freeport.

As new housing has expanded in Buffalo Township, so has the share of taxes paid its residents.

“I’m not for raising taxes anywhere, but also, living in Armstrong County, I’m not for my taxes going that far down,” Risch said. “I feel that continues the burden on Buffalo Township.”

Risch said district officials have voiced their discontent to state lawmakers and the equalization board about the equalization formula.

He also urged residents to attend the June 5 committee meeting and June 12 school board meeting to voice their thoughts on tackling the deficit. The district has until June 30 to finalize the budget.

“Come to the meetings,” Risch said. “We listen. We also will educate.”