Panther Valley School District officials are projecting that the district will finish the 2020-21 school year with a negative fund balance.

School officials say they plan to take a hard look at the budget before June, when they are required to pass a final version.

Meanwhile, board members must look for a new superintendent to replace Dennis Kergick, who is retiring when his contract expires in June, and address its contract with its teachers’ union, which also expires in June.

“There are a lot of miles to travel and obviously we will all be working together to find savings,” Kergick said.

School board members voted Thursday to adopt a preliminary budget with a 2-mill tax increase, after voting to reject a 5-mill increase.

The preliminary budget includes $29.5 million in expenses.

Even with the proposed tax increase, the district is still projected to lose $1.5 million next school year, business manager Kenneth Marx said. The district is also projected to lose $800,000 this year.

If that holds true, the district would finish next school year with a fund balance of negative $900,000.

Marx said it would be fiscally irresponsible for the district to pass a final budget with a negative fund balance.

As of 2017, at least 18 of the 500 school districts around the state had a negative fund balance.

Marx said that the district’s expenses have increased by $300,000 this year. Meanwhile, property values have decreased, so the board has to raise the millage to get the same amount of tax revenue as the previous year, he said.

Marx said that the district’s funding from the state grows by about $100,000 per year. The district’s state funding won’t be finalized until the state passes a budget in June, but Gov. Tom Wolf’s budget address next month will provide some idea.

Board President Gary Porembo said the board plans to meet Feb. 5 and take a hard look at the budget to see what changes it can make.

“We’re going to go strongly through the budget and see which way we can make it,” he said.

If the board passes the same budget in June, district residents living in Carbon County would see their taxes increase by 7.7 percent. Residents living in Schuylkill County would see their taxes increase by 8.8 percent.

The owner of a property in Carbon County assessed at $50,000 would have a tax bill of $3,345, an increase of $111. The owner of a property in Schuylkill County assessed at $50,000 would have a tax bill of $2,940, an increase of $100.

The district’s budget and finance committee will meet to discuss the budget on Feb. 5 at 5 p.m. at the district’s administrative offices.

In other business

The board voted to approve a new contract with Marx, running through the 2023 school year. Marx’s will have a salary of $90,000 next year and three-percent raises in the following years.

Kergick presented the board with certificates for School Board Recognition Month.

The board approved a $40,520 payment to Auto Glass Shop of Hazleton for work done on the main entrance to the Junior-Senior High School. The work was funded with a school safety grant.