Lehighton Area School District ran an estimated $3.1 million deficit in the 2025-26 school year, Superintendent Jason Moser told the school board Monday night.

The figure comes from preliminary data being compiled for the district’s annual financial report, which has not yet been audited or submitted to the state.

“When I first heard the $3.1 million, please understand, I was not very happy,” Moser said. “That’s actually an understatement.”

He identified two drivers. The 2025-26 final budget was passed with a built-in deficit of $354,656. Another $2.3 million came from overspending in the 1200s — the budget category covering special programs.

Together those account for roughly $2.7 million of the shortfall. Moser said the rest is still being analyzed.

Within the special programs category sit tuition costs for students placed outside the district, at the Carbon Lehigh Intermediate Unit and at Behavioral Health Associates, along with related services and transportation. Those outplacement costs ran well past what the district projected.

Revenue was not the problem. The district projected $49,756,162 in the final budget and brought in an anticipated actual total of $49,722,277; a gap of less than $34,000, or under one-tenth of 1%.

Moser used that number to push back on criticism leveled at his administration during last year’s budget season.

“There were statements made in this room at that time that administration always underestimates revenues,” he said. “I told you then that we do not play that game. I can acknowledge that it is often done in a lot of places.”

Cost drivers

Moser told the board the deficit should not come as a shock to anyone following the district’s finances, and said he and Matthew Lentz, who previously oversaw district finances for EDM Financial, had flagged the special education overrun publicly in February.

“Mr. Lentz and I predicted around $2.3 to $2.4 million,” Moser said. “Once we actually knew actuals and numbers of students and we could drill down, we were able to get an understanding of where we were at.”

Moser then posed the question he said he would ask if he were in the audience.

“What the heck are you doing to close a $3.1 million deficit? I think that is an incredibly fair question to ask,” he said.

His answer was the staffing changes the board approved over the summer, including positions added in special education. Bringing students back in-house, he said, costs more in salaries but far less than outside tuition payments.

“We have reduced our number of outplacement tuitions from 47 down to 24 in a very short amount of time,” Moser said. “While we went down some staff members in other areas, we did go up in special education. But it was with a very targeted purpose, in order to carve into what we knew was going to be about a $2.3 million deficit.”

He asked the board to recognize the burden that shift has placed on employees.

“That has strain with it, so I would ask that our staff be given some grace,” Moser said. “I want to applaud our staff for accepting those changes and working through them, because it is what’s best for kids and it’s what’s best for the district in the long run from a financial sustainability standpoint.”

Tightening up

Asked by directors whether the district expects to cut the deficit roughly in half this year, Moser set a tighter target.

“I will be disappointed if we’re over a $300,000 deficit,” he said. “I’m not sitting here promising that, because you never know what could happen.”

The district, he added, is watching spending more closely than it has.

“This year we are spending a great deal of time and energy on closely scrutinizing and monitoring our expenditures,” Moser said. “There is certainly an amped-up urgency that is there.”

Staffing costs account for 60% to 75% of the overall budget, he said, making them the single largest factor in managing it. A staffing plan for next year will take shape after the Nov. 1 deadline for retirement notices, alongside enrollment projections the district has begun developing.

Chris Lionetti, the EDM employee now helping oversee Lehighton’s financials, told the board the district anticipated carrying $9.5 million across four categories of fund balance into the current school year. Pressed by board member David Bradley on where that money originated, Lionetti said it accumulated over prior years when local revenue exceeded expenditures.

Bradley said the figure reflects overtaxing.

“To have $9 million sitting in the bank that we’ve taken from (our taxpayers), that we didn’t even use for the education of these students, is insulting,” he said.

For the current school year, Lionetti reported the district has collected $20.7 million of its $51.4 million revenue budget, or 40.3%, and spent $14.6 million of its $51.5 million expenditure budget, or 28.2%.

The annual financial report itself has not been filed. Moser said he will not sign the verification sheet until auditors confirm the figures are accurate. State code sets an Oct. 31 deadline, but every district receives an automatic 30-day extension to Nov. 30 without applying.