The math is stark.

With no change to its property tax rate, Lehighton Area School District would be projected to burn through its entire $11.6 million fund balance and land more than $2 million in the red by 2030, according to a budget presentation delivered at Monday night’s workshop meeting.

The district is operating under a $354,660 deficit for fiscal year 2026, but that figure is expected to compound sharply in the years ahead. Projected expenditures for fiscal year 2027 reach $51.9 million against $50.6 million in revenues, producing a deficit of $1.28 million. By 2029, the gap grows to $4.1 million, and by 2030, the fund balance turns negative.

The numbers landed hard on board members, several of whom questioned why financial information of that magnitude was not distributed further in advance of the meeting.

“This afternoon, (Superintendent) Mr. (Jason) Moser and I were looking at final revisions of it today to get it together to be able to talk about tonight,” business manager Matt Lentz said.

Board member Dave Bradley pushed back.

“The board should have the information, especially financial information, in advance of a meeting, in advance of a workshop,” Bradley said. “The public needs to see it because they can make a comment. There’s 20 people online that need to see it.”

Director Denise Hartley offered a more pragmatic view.

“This is a workshop,” she said. “We have now. It’s here. We have until the next meeting. Anyone can review it and come back with comment. We do have two weeks now to review it and look at it.”

Increased costs

The financial picture has been years in the making. A four-year expenditure trend presented by Lentz shows total spending has climbed 21.59% since fiscal year 2022 — from $42.49 million to $51.66 million in 2024-25. The district also lost roughly $2 million in federal ESSER pandemic relief funds in a single year, representing what the budget document described as 5.2% of the entire operating budget evaporating at once.

The sharpest cost spike in the data is in special education. Special education costs have jumped 94.19% over four years, rising from $3.65 million in 2021-22 to $7.08 million in 2024-25.

“It looks like the highest percentage increase is special education costs,” Hartley said. “That will be the reason we’re looking at moving in-house.”

Superintendent Jason Moser framed the shift toward in-district special education services as both a philosophical and financial priority.

“I actually believe, philosophically, if we can provide those students with the services that they need to be successful in their own school, amongst their own peers, that is the best case scenario,” Moser said. “The cost is tertiary. But I think too often, when it is not necessarily the best situation, we have seen students who have been in an outplacement longer than they may have been in our buildings.”

He noted that some students have never attended a Lehighton building at all, and that the district is working to build a fuller continuum of services internally.

Revenue challenges

On the revenue side, the picture is equally challenging. Property tax revenue has actually declined over four years, dropping $535,615, or 2.7%, from fiscal year 2022 to fiscal year 2025. Federal revenues have cratered with the end of ESSER funding. State revenue increases, while appearing positive on paper, are largely offset by the corresponding rise in payroll costs they reimburse, according to officials.

Lentz presented three tax increase scenarios under Pennsylvania’s Act 1 Index, which caps how much a school district can raise property taxes in a given year without a voter referendum or state exception. The 2026-27 index for Lehighton is capped at 4.8%.

Under a 4.8% tax increase, a homeowner with a property assessed at the median value of $46,500 would pay an additional $115.75 per year, or $9.65 per month. A below-median property assessed at $31,500 would see an increase of $78.41 annually. A 1.8% increase — the lowest scenario presented — would add $43.41 per year to the median homeowner’s bill.

Despite those options on the table, board members also received a scenario showing what a tax decrease would look like. Under a 1-mill reduction, the district would immediately run a $782,709 deficit in fiscal year 2026, growing to more than $6 million by 2030 and leaving the fund balance at negative $6.07 million.

Even without a tax cut, the district’s current trajectory is unsustainable, Moser said. He identified two primary levers available to the board.

“Simplistically and crudely, there are only two ways: one, increase revenues; two, reduce expenditures,” Moser said. “The reality is, the deficit we have — even if we were to go to the Act 1 index — it actually does not close your deficit. It doesn’t even come close.”

He identified two areas where he believes spending can be reduced without directly harming students: out-of-district placement costs and salary adjustments. Those two factors, he said, account for roughly 85 to 90% of the district’s overall budget, with debt service adding another 6%.

“We have to look at how we are spending, where we can reduce those things, and how it actually has an impact on our structural deficit — not just an annual deficit, but a structural deficit that’s going to appear year over year over year,” Moser said.

Historical data

Over the nine years tracked in the presentation, the average Act 1 Index allowed an average annual tax increase of 4.57%, but Lehighton’s average actual tax rate change was just 0.91%.

Bradley, however, challenged the administration on whether the district has been collecting more than it needs.

“If you look at how much we spend on our staff members and their benefits, and divide that out by how much goes to each student for those services, there’s still another 40% of this budget — $20 million — being consumed somewhere else,” Bradley said.

He also pressed the board to examine individual budget line codes against comparable districts statewide.

“I went to the state and I pulled an Excel data sheet for all of the districts, and I took all of their financials — every one of the 500 — and then we sorted them by the population of their districts,” Bradley said. “Then you can break it out by individual codes within the budget and see where we are exceeding the other commensurate districts.”

Moser acknowledged the fund balance history shows years of surplus that grew the reserve. The district ran surpluses of $3.76 million in fiscal year 2021, $4.77 million in 2022, and $3.81 million in 2023, before a $2.8 million surplus in 2024 that included a debt refinancing transaction. Last year’s actual results, which included a transfer of funds to capital reserve, showed a $5 million swing to the negative, landing the fund balance at its current $11.6 million level.

“The sticker shock is going to be next year’s budget, now that we have a better idea of where our actuals land,” Moser said.

The district also noted it does not yet have finalized labor contracts for professional or support staff, and health care rates from its broker had not been confirmed as of Monday night, both of which are major variables in projecting next year’s costs.

Board President Alex Matika asked whether the district’s plan to bring special education services in-house was factored into the projections.

“To the extent that we have known, absolutely,” Lentz said. “The students transitioned back into the district today, those knowns are a part of both this year’s budget as well as what’s in the budget next year. But we don’t have it all ironed out.”

Course enrollments examined

District resident Roy James suggested Lehighton examine its course offerings for potential savings, noting that some classes are sparsely attended.

“I think some of the classes are just a little superfluous for a school this size,” James said. “We should look at the curriculum.”

“Those are definitely things that we are working on,” Moser said. “We have been looking at that in the last several months — looking at course enrollments, how many students are taking a course, so that we can be able to kind of make some of those better determinations.”