The Panther Valley School Board has rejected a budget that would raise property taxes for residents.

Now the board has less than two weeks to approve a budget or risk losing funding from the state.

At a meeting Wednesday night, board members voted 5-2 against passing a proposed budget with expenses totaling $26,913,851.

The administration had recommended a tax increase of 2 mills for Carbon County residents and 3.16 mills for Schuylkill County.

But a majority of board members refused to approve the spending plan.

Gary Porembo and Justin Foster were the only board members who voted in favor of the increase. Porembo said he supported the budget because he knows the district must cover its expenses.

“That’s why I voted for the budget, just to get this school district going and see where we can cut in the future,” he said.

Business Manager Ken Marx said even with the proposed tax increase, the school district faces a $700,000 deficit, which would have been made up from the district’s general fund balance.

As of now that balance is $1.5 million, meaning the district will run out of money in less than three years, even with the tax increase. Marx said that the district has been using the fund balance the last four years because spending has exceeded revenue.

“It would be a different story if the state was paying us more money, but they’re not at this point, so we have to turn to our taxpayers,” Marx said. “It’s not a popular decision, it’s just the way it is.”

Marx explained that each year the district cuts electives in the high school and moves teachers from grade to grade rather than creating new positions.

But expenses increase each year, particularly teachers’ salaries, which are controlled by contracts; pension contributions, which are determined by the state; and charter school tuition, which the district is required to provide.

“Charter school tuition, we’re already $150,000 over budget this year,” Marx said.

The district has also explored other avenues for funding, recently filing a lawsuit against a collections agency in an attempt to recover delinquent tax money that the district believes the agency collected and never handed over. Panther Valley is also a party in a landmark court case brought against the governor and lawmakers by low-income school districts and families. The lawsuit seeks to revamp the way the state gives out education funding to make it more equal for poorer districts like Panther Valley.

School districts are required to pass a budget by June 30. If they do not, they risk losing funding from the state. About half of the district’s budget is funded from state sources.

The board agreed to schedule a special meeting for June 28 at 6 p.m. with the intention of passing a final budget. Whether it will include a 2-mill tax increase, significant budget cuts, or some mix of both, is unknown.

“We’re going to have a few scenarios, and we’re going to accept them, or not,” board President Wayne Gryzik said.