The School District of Lancaster can rely on federal pandemic relief in the short term, but will need to take steps to close a long-term structural deficit, administrators said at a community forum on the district’s budget.
Absent any changes, the district projects a deficit of $12.7 million next year. That includes using approximately $10 million in federal money, delivered as part of three waves of COVID-19 pandemic relief.
The school board could consider an increase in real estate taxes, though the board passed a resolution in January not to exceed the Act 1 index, which limits a tax increase to no more than 4.8%.
Another variable the board likely won’t know when it votes on the district budget in June is wither the state will provide any additional basic education funding. Gov. Wolf has proposed a 32% increase in the district’s subsidy, more than $21 million, based on the state’s basic education funding formula. But the state Legislature would need to appropriate an additional $416 million in state funding, which would be the largest increase in public education funding in Pennsylvania history.
Historically, SDoL has received an increase of about 3% annually.
Two additional long-term challenges for the district are declining enrollment and aging facilities. SDoL’s enrollment is hovering near 10,000, nearly 9% lower than in 2017. The decline hasn’t happened evenly, meaning some district schools are still crowded, while others have additional capacity.
At the same time, the district projects more than $133 million in needed school renovations, especially to aging buildings like Burrowes, Hamilton, King and Price elementary schools, as well as Wheatland Middle School. Most of these buildings have not been renovated in decades and lack modern ventilation and air conditioning. At the same time, the board is considering a $12 million plan to renovate and upgrade the district’s athletic facilities, most of which lag behind SDoL’s peer districts.
The district will likely finance these upgrades. Its current net debt service is more than $12 million annually, a figure that does not drop significantly until 2037.
On the plus side, the district is leveraging $72 million in federal funds through 2025 to support capital projects, including improve ventilation in schools, curriculum development, technology, and staffing, as well as reduce the deficit. The funding ends in 2025, so most investments are time-bound.