Lehighton Area School District is staring down a budget deficit of more than $1.5 million heading into the 2026-27 school year. A contentious debate over how to close the gap, through tax increases, staff reductions or both, dominated Monday’s workshop meeting.

According to budget documents presented Monday, the district projects revenues of $50,579,853 against expenditures of $52,112,449, a shortfall of $1,532,596 even before a penny of tax increase would be applied. Health care costs alone, officials said, are rising 11.5%, and total salaries and benefits are projected to climb 6.35%, adding more than $2 million to the spending side of the ledger.

The board has the option of raising taxes within the Act 1 Index, which allows increases up to 4.8% without going to referendum. But even at the maximum allowable rate, the deficit does not disappear. A 4.8% increase would generate an additional $868,066 in revenue, leaving a remaining deficit of $664,530. A more modest 2.8% increase would still leave the district more than $1 million in the hole.

The district’s proposed budget must be approved by May 26, with final budget approval set for June 22.

Director Denise Hartley asked Monday what the numbers mean over time, raising the possibility that current spending patterns could exhaust the district’s reserves within a few years.

“If we use the fund balance for this year to cover the deficit, I believe by 2030 there would not be any fund balance,” she said.

Business Manager Matt Lentz confirmed the trajectory, noting that the district currently has approximately $4.9 million in available unassigned fund balance.

“In each of the potential budget situations for this year, there’s still a deficit that remains,” Lentz said.

Staffing issues

The discussion quickly turned to staffing, which accounts for the largest share of the district’s spending. Director David Bradley argued the district has an opportunity to address the deficit through what he called “student-centric budgeting,” starting with enrollment and classroom needs rather than existing staff levels.

“We’re the elected officials,” he said. “We have the responsibility. We’re supposed to create a budget. You decide how many students you have, therefore how many teachers you need, how many classrooms you need, what the curriculum is offering and from there you create the budget.”

Superintendent Jason Moser acknowledged the need for efficiency but cautioned against moving too aggressively, particularly when it comes to cutting positions.

“We are in a position where we have to tactically and strategically look at every retirement and what is the value of that position, what is the need for that position,” Moser said. “We have to be very thoughtful about it and very methodical about it.”

The board, solicitor Jeff Sultanik said, cannot unilaterally cut professional staff. Any reorganization must come from the superintendent.

He added that even with a superintendent’s recommendation, which Moser was not making, timing presents a serious obstacle.

“I need to tell you that it is late in the process to go through this issue, because for professional staff, it is a very complicated issue involving seniority and specific justifications for a variety of programs in the district,” Sultanik said.

The district employs 169 professional staff members. Board members discussed what a 5% reduction, roughly eight or nine positions, would mean financially. A separate discussion about the employee retirement incentive approved earlier Monday suggested savings of $70,000 to $80,000 per position eliminated through that program, or approximately $560,000 if eight employees accepted the offer.

That figure, while meaningful officials said, still falls well short of closing the full deficit.

Tax debate

“I propose that at the next meeting we have a budget that shows no tax increase,” director Joy Beers said.

Others pushed back on that approach, arguing that relying entirely on spending cuts carries its own risks, particularly given the district’s obligations to students with special needs, where out-of-placement costs at programs like Behavioral Health Associates are running higher than budgeted.

“The current budget, because the special education costs are over what was budgeted, that number based upon final billings could also be over for the current year,” Lentz said.

The budget conversation grew intense enough that the board voted to recess into executive session to discuss personnel and negotiations. Upon reconvening, board members said the financial discussion would continue once more data is available, including the impact of the teachers union contract expected to be voted on Thursday and the retirement incentive decisions due by June 20.

“The reality is we have to look at reallocation as we look at potential attrition,” Moser said. “The deficit only then increases year over year and reality is that reallocation and attrition alone is not going to balance the budget,” Moser said.