During the 2020-21 school year, Jim Thorpe Area School District spent $3.5 million more than it took in.

That is less than the $4.9 million deficit it had budgeted, but still too much for board members who are concerned that the district is depleting its financial reserves.

“We can only pull from this fund balance for 2-3 years until we’re flat broke. The public has to realize that,” school board member Paul Montemuro said during a board meeting last week.

The district’s auditor, Edwin Ebling of Jones and Co., presented the results of the district’s 2020-21 audit during the meeting. He said that the district had approximately $10 million in its fund balance after the $3.5 million loss. Its 2021-22 budget calls for the district to once again use its fund balance to cover a budget deficit.

The report came as the district is preparing its budget for the coming school year. Districts must pass final budgets by June 30.

Ebling said that he cautions all districts to be careful if using their reserve funds to cover budget deficits.

“I just would caution you on how the amount of how you are utilizing your fund balance to subsidize your current operations,” Ebling said.

The district has not raised taxes since 2014. But since that time, expenses have increased by more than one-third - from $33 million in 2014-15 to $45 million in 2020-21. The approved budget for this year has $50 million in expenses.

“The expenditures are exceeding the revenue received. That is a message to the board that you need to watch what you’re spending,” school board President Scott Pompa said.

The district’s business manager, Ken Marx, recently presented the board with a ranking of how the district spends compared to other schools in Carbon-Lehigh Intermediate Unit 21. Marx said that on a per-student basis, the district spends more when it comes to special education and cybercharter schools.

Cyber tuition cost the district $1.2 million in 2014-15. In 2020, it was $2.4 million. In 2020-21, it was $4.4 million, a single-year increase of $2 million.

Special education was $5 million in 2014-15 and $8 million in 2019-20. The budgeted amount for 2021-22 is $9.5 million.

And while its per-student spending on salaries and benefits are average among CLIU schools, the cost has still increased by several million dollars since 2014-15 - from $20 million in 2014-15 to an estimated $28.5 million in 2021-22.

Marx said that leaves the district the option of raising taxes, cutting expenses, or both.

“If your expenses are increasing every year, and going up by millions of dollars, but your revenue is not going up by millions of dollars, you have to make changes,” he said.

During last year’s budget process, Marx recommended a 1-mill tax increase. The board voted to keep taxes level.

Montemuro said he won’t support a tax increase this year either. He said that over half of the homeowners in the district do not have students enrolled in the school district, and should not be forced to pay more in taxes. Montemuro said he is in favor of cutting expenses and leaving vacant faculty positions open in order to improve the district’s finances.

“The way the economy is going, (it’s) the last thing anyone needs, we just can’t raise taxes period. Where we’re at is where we’re at, we have to tolerate it,” he said.

In other business, the school board:

• Voted to allow cybercharter students to participate in high school graduation ceremonies.

• Accepted the retirement of Dave Althouse, tech education teacher; Amanda Hydro, high school English teacher, Sara Tite, high school computer teacher, and Kathleen Schlecht, high school paraprofessional.

• Accepted the resignation of Ashley Rulley, Penn-Kidder guidance counselor, and Terry Blose, Penn-Kidder custodian.