CLEARFIELD – The Clearfield school board on Monday night voted to adopt its tentative budget for the 2024-25 fiscal year as presented by Business Administrator Sam Maney.
Prior to the start of his budget presentation, Maney reminded the board and the public that it was all tentative especially the proposed tax increase.
On Friday, March 13, 2020, former Pennsylvania Gov. Tom Wolf ordered the closure of all public schools across the state due to COVID-19.
To assist school districts with the increased pandemic costs, Maney said the federal government awarded Elementary and Secondary School Emergency Relief Fund (ESSER) grants.
The ESSER grants are limited to specific expenditures and have time constraints as to when they must be spent. ESSER grant funds expire Sept. 30, 2024.
Recently, the district was approved to use ARP-ESSER funds to reimburse expenditures that were not previously believed to be reimbursable.
The 2023-24 projected revenues include $3,514,725 of ARP-ESSER reimbursements for those expenditures.
And, while the district anticipates a surplus of $3,125,504 for the 2023-24 fiscal year, Maney attributes it almost entirely to the ARP-ESSER reimbursements.
“Without it, we would end in a deficit.”
And, although the district has received significant increases in the state basic education subsidy for the last three years, future basic education funding remains uncertain, Maney said.
This places the district in a “challenging” financial position. It must continue to budget for anticipated increased costs with local dollars, he said, and the appropriate reserves in the district’s general fund balance will be allocated in anticipation of these increased costs.
The 2024-25 tentative budget—as proposed—gives the board the ability to raise taxes up to 7.77 mills.
This is due to the uncertainty of state and federal funding, Maney said, adding that he belieaves millage increases are likely in the district’s future.
“Millage increases are never fun. But, as I’ve said all along, we’ll reach a point where our expenditures catch up with our revenues and we’ve reached that point.
“Without ESSER [this year], we would end in a deficit. Going forward, if we don’t do anything, we’ll continue to have deficits and start to erode our fund balance.”
The budgeted value of one mill of real estate tax generates approximately $146,124 in Clearfield County.
The district receives 38 percent of its revenue from local sources, 55 percent from state sources and 7 percent from federal sources.
The expected revenues for the 2024-25 budget are $46.89 million, which represents a 4.30 percent decrease, or $2,106,189, from the current budget.
In the budget proposal, local revenues are projected to increase by 6.58 percent due to the projected increases in real estate tax revenues and investment income.
The state’s funding for the district is projected to increase by 3.95 percent for the 2024-25 school year primarily due to increases in basic education and transportation subsidies and federal revenues are expected to decrease by 57.83 percent for next school year due to loss of ESSER grants.
The 2024-25 budget expenditures are $52.72 million, which represents a 3.25 percent decrease in expenditures, or $1,771,424, from the current budget.
The general fund balance, as of June 30, 2023, was $15.70 million.
For the 2023-24 fiscal year, revenues are expected to generate an approximate $3,125,504 surplus, and the fund balance is estimated to be $18.82 million on June 30, 2024.
And, while that gives the look of financial health, the district anticipates to end the upcoming fiscal year with a $5.82 million deficit, which would begin the erosion of its fund balance to just short of $13 million June 30, 2025.
Maney emphasized that the proposed 7.77 millage increase was anything but final, and its inclusion in the tentative budget just gives the board more options and the ability to raise taxes up to the state’s maximum index for the district, or anywhere in between, if at all.
With adoption of its tentative budget, it’s now available for public inspection. The board will consider its final adoption during its regular board Monday, June 24.