At the Lancaster Chamber’s 154th annual dinner last month, speaker Malcolm Gladwell talked about a critical shortage of trust across our country and our world.
As the School District of Lancaster school board prepares to vote on a final budget for the new year that is difficult for both our schools and our taxpayers, I want to acknowledge the strain on trust in our own community. I also want to provide a clear understanding of how we arrived at our current financial situation and how we will move forward together.
Gladwell said trust does not come from competence alone, but rather through sharing the values that drive our work. I want to do that also.
Our 2026-27 budget tops $300 million in expenditures for the first time in our history. To close a projected $35 million deficit, the budget calls for more than $17 million in difficult cuts, relies on $16 million in one-time revenues and raises real estate taxes by 4.7%, or about $17.28 per month for an average single-family home.
None of us wants to craft a budget this difficult. But it is necessary, and it has been coming for several years.
Some commenters have pointed to an $8.1 million salary projection error, made two years ago, as the cause of these cuts and tax increases. That is not accurate. The projection error, which we disclosed publicly following our annual audit, was a one-time issue that resulted in the elimination of our fund balance.
As we explained then, our accounting software, which we relied on to project salary costs, failed to account for 83 employees. These employees were paid as normal, but with funds we had not budgeted. That is why we unexpectedly eliminated our fund balance. No money was stolen, lost or improperly spent.
Some have suggested that “transparency” would reveal something more serious or intentional. That is not the case, as confirmed by our outside auditors. This was a mistake — a failure to verify projections that should have been caught — and we have been clear about that from the beginning.
We took immediate action by pausing some after-school tutoring, planned maintenance and contractual spending, and by refinancing debt to reduce expenditures this year by an equivalent amount. If the accounting error were our only issue, it would be resolved. It is not.
I have received many questions about accountability. As superintendent, I am responsible for all operations of our district, and I take that seriously. One of our district values is high expectations, and we have them for students and staff alike.
We have since added layers of verification for projections, strengthened financial reporting to the board and made changes in financial leadership. We are currently searching for a new chief financial officer and assistant business manager.
There is, however, a difference between accountability and scapegoating. I am troubled by the tone of some of the public conversation, particularly when it focuses on individuals rather than solutions. That approach does not strengthen our schools or our community.
Accountability means taking responsibility, learning from mistakes and making the changes needed to move forward. We embrace a growth mindset — another of our values — that allows us to improve and emerge stronger.
Here is what is driving the current decisions. Since 2015, our expenses have increased at an average of 4.1% per year while revenues have increased at 3% per year. That structural deficit cannot continue.
Our enrollment has declined by 13% since 2017, the equivalent of three elementary schools, and is projected to decline another 12% over the next decade. Yet our number of teaching positions has grown by 13% over that same period. That is not sustainable.
Many of the biggest cost drivers are beyond our control. Special education costs are up more than $10 million since 2020, while state special education funding has increased by only $2.5 million. Healthcare costs are up 65% since 2020. Charter and cybercharter tuition is up 60%, and electricity costs have doubled.
The only revenue we directly control is local real estate taxes, and that represents less than a third of our total income. From 2011 through 2024, the school board’s average tax increase was 2.2%, less than inflation, in the middle of county averages, and far below the growth of our expenses. State funding has helped at times, but it is inconsistent and beyond our control.
No one wants to make these decisions. Our staff is the heart of our district, and our students are our purpose. Reductions have real impacts on people and on programs that matter deeply to our community.
That is why, for several years, we delayed this reckoning. We used COVID-19 relief funds to sustain positions and we drew down our fund balance, which was nearly $31 million just six years ago, to close annual gaps. Those resources are now gone.
We have a responsibility to act now — not just for today, but for the long-term health of the school district and the community we serve. Waiting longer would only make the decisions more difficult and the impacts more severe. We know more decisions about right-sizing our district are coming.
But there is good news.
The School District of Lancaster remains one of Pennsylvania’s leading urban districts. Our schools are filled with experienced, committed educators who help students grow academically, socially and emotionally. Our music and arts programs are widely recognized. McCaskey High School offers students a wide range of pathways, from International Baccalaureate and Advanced Placement to one of the region’s most extensive career and technical programs. Reynolds Middle School sent three teams to National History Day, including a state champion. And our girls track and field team recently won the PIAA championship.
These are not small things. They are the result of years of effort, investment and belief in our students.
Rebuilding trust will take time, and it will require us to lean into some other of our values — collaboration, achieving together through teamwork, open communication and shared responsibility.
I believe in this community. I believe in our students. And I believe that if we stay focused on what matters most and work together, we can come through this period stronger and more sustainable.
Keith Miles, Ed.D., has been the superintendent of the School District of Lancaster since July 2023.