The Jim Thorpe Area School District board of education voted 5-2 on Wednesday night to approve its 2025-26 budget, which includes a 4% property tax increase. The decision followed months of discussions about long-term financial sustainability, state funding shortfalls, the impact of cyber charter costs, and the district’s infrastructure needs.

The approved budget sets expenses at $53.1 million, while anticipated revenues — factoring in the tax increase — are projected at $51.1 million. That leaves the district facing a $2 million shortfall. Without the 4% increase, the deficit would have grown to $3.2 million, with revenues estimated at just under $50 million.

“This 4% increase equals about 1.8 mills and adds approximately $1.2 million to the district’s revenue,” Business Manager Brian Off told the board.

According to the presentation, the average assessed property value in the district — which includes Jim Thorpe Borough, Penn Forest Township, and Kidder Township — is around $40,000. For properties at that value, the 4% increase equates to an additional $73 in annual school taxes. However, for homeowners who qualify for the homestead exemption, the state-funded reduction in taxes results in a net increase of just $25.

“Anyone with an assessed value under $27,000 would still see no increase or a decrease in taxes,” Superintendent Robert Presley said. “And 88% of all households in the district are at or below a $75,000 assessed value. Even at that amount, the tax increase would only be $88 per year.”

Some board members raised concerns about the tax burden on residents, particularly senior citizens or renters who may not benefit from the homestead exclusion.

“There’s a lot of rental units in the district,” board member Gerald Strubinger said. “Those renters don’t get the homestead benefit.

The final vote on the budget was 5-2, with board members Strubinger and Dennis McGinley voting no. Two members were absent.

“I’m 77,” McGinley said. “My father was 96 when he passed, and he paid taxes until the end. I’m tired of paying taxes, and I think most people in this room are tired of it, too.”

District officials addressed recent tax revenue declines from major reassessments. The district lost roughly $70,000 in tax revenue, Off said, due to decreased assessed values for properties at Penn’s Peak and Split Rock.

While some members advocated for holding the line on taxes, others in the district warned of the long-term consequences of relying too heavily on the district’s fund balance, which currently stands at around $12 million.

“Our financial team estimated that going below a certain level with our fund balance could have a negative impact on our next bond issuance by up to $3 million,” the member said.

The district anticipates needing that bond within the next three to six years to fund facility repairs and upgrades. A feasibility study identified $46 million in infrastructure needs across district buildings over the next decade, much of it rated as urgent.

Presley also pointed to inequities in state funding as a key reason for the district’s financial challenges. Because the district hasn’t raised taxes in 13 years and its property values and average income have risen, he said, that negatively affects Jim Thorpe’s allocation in the state’s Basic Education Funding formula.

“The formula assumes we can raise more money locally,” Presley said. “Because of that, we’re actually losing $273,000 in state funding this year compared to last year. Only the City of Pittsburgh is losing more across Pennsylvania.”

In addition to budget shortfalls and reduced state funding, the district is grappling with the escalating costs of cyber charter schools. Presley said the district is currently spending more than $4 million annually on cyber charter tuition.

“I have continually talked about the waste that goes on,” Presley said. “The four largest (cyber charter) ones are holding a half a billion dollars in fund balance. We are not allowed to hold that.”

Presley said proposed legislation — House Bill 1500 — could save the Jim Thorpe district $2.5 million if passed. “I’m told that it’s dead on arrival at the Senate,” he said.

Presley emphasized that the bill goes beyond financial relief and would require cyber schools to follow the same regulations imposed on public districts, including more stringent registration procedures.

“We’re currently chasing two families that do not live in this district, and we are having a hard time trying to get them off our cyber rolls,” Presley said. “We believe they live in New York City, but the system just requires a driver’s license showing a local address.”

He also criticized the use of taxpayer funds for advertising, bonuses, and giveaways by cyber charter schools.

“It costs taxpayers tens of millions of dollars a year for things that have nothing to do with education,” he said.

Presley urged the public and board members to contact local lawmakers, including Senator Argall, who sits on the Senate Education Committee, to advocate for reform.

“We’re not asking for more money,” he said. “We’re just asking for the state to stop the faucet that has been leaking continuously.

The district also faces uncertainty regarding federal grants, including Title I and pre-K funding.

“There are a lot of ‘what-ifs’ right now,” Board President Mary Figura said. “If the federal government pulls back on these, we could be looking at even more expenses we have to cover.”

Another concern raised was that the state’s index — the cap on how much school boards can raise taxes without voter approval — is expected to drop in coming years. “This year it’s 4%, but next year it’s estimated to be 3.5% and will likely continue to decrease,” Presley said. “If we don’t raise taxes now, we won’t be able to raise them fast enough later to close the gap.”

Strubinger proposed exploring consolidation with other Carbon County school districts as a long-term solution.

“Districts like Lehighton and Panther Valley get a lot more from the state than we do,” he said. “Lehighton gets around $12 million from the state. We get around $2 million. Their assessed valuations are low, mostly farmland, so the state gives them more. Maybe it’s time to consider merging with districts like that.”