Panther Valley is faced with a dwindling reserve fund and a budget shortfall and must make decisions about raising taxes.

If Panther Valley school board members plan to raise taxes more than 4.6 percent this year, they must announce those intentions by Feb. 1.

It’s likely that board members will vote on that decision Wednesday night during their monthly meeting, unless they decide to call a special meeting later in the month.

School district budgets for 2021-22 school year aren’t due until June 30.

But if districts wish to adopt a tax increase greater than the Act 1 index as part of the 2020-21 budget, they have to receive state authorization.

Jan. 28 is the deadline for districts to advertise a preliminary budget if they plan to raise taxes more than the Act 1 index. Feb. 17 is the deadline to pass the preliminary budget.

Panther Valley’s Act 1 index for the 2021-22 school year is 4.6 percent.

The current school property tax rate for Panther Valley residents in Carbon County is 65.44 mills. The current rate for district residents in Coaldale is 60.2 mills.

According to early projections, the district has to close a $1 million budget shortfall. If that holds true, the district will have to make major cuts to extracurricular programs and classroom aides, raise taxes or both.

“It’s about taking the least bad option,” said business manager Jesse Walck, who joined the district last July, after the 2020-21 budget was passed. It’s also the first full budget cycle for Superintendent David McAndrew Jr. and board President Danny Matika, who were appointed in May 2019. Under previous administrators, the district has borrowed from its reserve funds due to expenses exceeding income.

But after years of borrowing, they are projected to run out of reserve funds by June 30, the end of this fiscal year. If that happens, the district will have to borrow against next year’s tax revenue in order to cover expenses.

Funds lost to cyber schools

At the same time, more students choosing cyber charter schools means less state funding. Cyber charter expenses are expected to top $3.5 million this year, however the district budget only anticipated about $2 million.

When a student living in the district chooses a cyber charter, their tuition cost is automatically subtracted from the district’s state funding. The cost for Panther Valley is $8,505 per student, and $32,306 if the student needs special education.

Walck said there are several new special education students who live in the district but are enrolled in cyber charter school.

McAndrew said that there have been calls for lawmakers to let school districts spend the upcoming second round of COVID stimulus funds on cyber charter schools. School board members are frustrated with the impact of cyber charter tuition on the budget.

“It’s not just Panther Valley, it’s everybody. With COVID, the increases are even more than they were. It’s insane,” said board member Renee DeMelfi.

COVID funds

The district did receive over $1 million in COVID funds, but the state restricts them from spending that money on annual expenses like salaries and health care.

McAndrew said that the district did spend its CARES funds with an eye on the future, buying multiple years worth of supplies in hopes that it will lead to savings in future budgets.

Another factor in Panther Valley’s budget is an above average year of health insurance claims among its employees, which will translate to increased insurance costs in 2021-22.

During Wednesday’s meeting the board is also expected to vote whether to approve the Carbon Career and Technical Institute budget, which calls for them to contribute more money than they did in 2020-21.

The 2020-21 budget was nearly completed when they were appointed to their positions.

The school board meeting will take place Wednesday at 7 p.m. A livestream of the meeting is available at panthervalley.org.