Jim Thorpe Area School District’s Board of Directors approved a proposed final 2025-26 budget Wednesday with a 4% property tax rate increase via a 6-2 vote.

The proposed increase comes as the district faces what Superintendent Robert Presley described as the second-largest state funding loss in the state due to changes in Pennsylvania’s basic education funding formula.

“The only district losing more money in this budget is the city of Pittsburgh,” Presley said. “They’re losing $4 million. We’re losing $273,000. Nobody else is even at $200,000. Most of the money that’s being directed to schools is going through adequacy funds or tax equity funds. Jim Thorpe does not qualify for those funds whatsoever,” he said. “We get our funds based on what’s called the basic education funding formula, which is not generous to us.”

Presley detailed how the formula works against districts like Jim Thorpe, which has seen property values and median income rise while poverty rates have declined.

“We are now receiving less and less money out of the basic education funding formula because of that,” Presley said. “The state is saying you can raise taxes, but you haven’t been doing it.”

The funding disparity is stark when compared to other districts. According to Presley, Jim Thorpe receives $3,233.06 per student from the state, while other districts in the county receive significantly more. “That puts us $3,700 behind two districts who get almost $7,000 per pupil, and it puts us $1,700 and $1,200 per pupil behind two other districts.”

Adding to the district’s financial burden is the cost of cyber charter schools, which Presley said costs the district $4.1 million annually. While the governor has proposed reforms to cyber charter school funding, Presley expressed skepticism about significant relief.

“The governor’s proposal is not going to go as it is designed,” he said. “So I do not expect a huge windfall from that.”

The district also faces substantial infrastructure needs. A feasibility study conducted by EI Associates identified $48 million in building renovation and improvement needs over the coming years.

“Penn Kidder alone has around $26 million worth of renovations that need to go to it.”

According to the district’s “2025-26 Budget Comparison” document, total expenditures for the upcoming school year are projected at $53,154,999. With no tax increase, projected revenues would be $49,928,749, leaving a budget shortfall of $3,226,250. With the proposed 4% tax increase, revenues would rise to $51,146,413, reducing the shortfall to $2,008,586.

The district’s fund balance is estimated to be $14,110,566 at the end of June 2025. Without a tax increase, this would drop to $10,884,316 by June 2026. With the 4% tax increase, the estimated fund balance would be $12,101,980.

“Yes we have a fund balance, but we are $3.2 million in the hole right now, and if we don’t try to decrease that a little bit, we’ll get to a point where you can’t raise taxes fast enough to catch up,” Presley said. “And then that means cuts to staff and programming.”

Presley also noted that the district’s ability to raise taxes is becoming increasingly limited under Pennsylvania’s Act 1.

“We’re only allowed to raise taxes to a certain percentage and last year it was 6%,” he said. “This year, it’s 4%. Next year, it’s going to 3.5% then 3.2% and then 3%. So every year, we lose the ability to raise taxes.”

Business Manager Brian Off emphasized that the 4% figure represents a ceiling.

“This budget is called the final preliminary,” Off said of what was approved Wednesday. “This sets the ceiling for the increase. It can always be lower, but our recommendation is 4%. If we get some better numbers throughout the next month or maybe this year finishes better than we expected, we can still make adjustments down from the 4%.”

Regarding the tax impact on residents, Presley said that 50% of the district’s population would see an increase of “$7 or less” due to increased rebates from the Homestead/Farmstead Act. “That rebate, which goes to around 4,100 properties, is going up $48 this year. It went up $45 last year. So that is going to help offset the tax increase. Almost 90% of our population will see an increase of $88 or less.”

However, the proposed budget faced opposition from at least one board member who argued against raising taxes.

“We probably could lower taxes if the state gave us our fair amount of money,” director Gerald Strubinger said. “We have to make a statement, but I don’t think the statement is to raise the taxes. So I’m going to vote no to raising taxes.”

In addition to Strubinger, Dennis McGinley was the only other Jim Thorpe board member to vote against the proposed budget.

A final vote will be conducted in June.