First Parkland budget projections show $20M deficit, possible tax hike

SOUTH WHITEHALL TWP., Pa. — Early projections show Parkland School District with a $20 million gap between rising expenses and nearly flat revenue, leaving the district likely to raise taxes next year.

While Parkland finance officials project its expenses will grow more than $15.1 million for the 2026-27 school year, early projections show revenue increasing only $670,000.

The imbalance leaves a roughly $20 million deficit. The district’s current budget includes a $5.5 million deficit, drawn from its fund balance.

Revenue estimates will increase before the budget is adopted, Parkland Business Administration Director Leslie Frisbie said, once the state adopts a new budget, new properties join the tax rolls and property tax appeals are resolved.

The district also will look for opportunities to cut spending.

However, the changes are unlikely to hold off a tax increase in 2026.

“The likelihood that we will recommend the tax increase to the max [Act One] index is very high,” Frisbie said.

“We’ve seen the trends and, unfortunately, that’s what it’s shaping up to look like in 2026-27, and it's not unlike every other school district in the area.”

'We have to change'

Per state law, Parkland can raise taxes only up to 3.5% in the 2026-27 school year without asking permission from voters in a referendum.

That amounts to a 0.623 of a mill increase, bringing the district’s property tax levy to 18.423 mills.

For the owner of a home valued at $200,000 for tax purposes that would mean paying $124.60 a year more in property tax.

Such a tax increase would raise about $5.8 million for the district, leaving a further $14.2 million deficit for officials to contend with.

Raising enough revenue to make up the entire projected budget deficit next year would require a 1.62-mill tax hike, which voters are unlikely to approve.

A 1.62-mill increase would mean owners of the same property would pay $324 a year more in property tax.

Almost all of the projected growth in Parkland’s expenses come from growing employee salaries and benefits, higher costs of out-of-district placements for students with additional needs, or increased tuition payments to charter schools.

The cost of staff health insurance and contributions to the state’s Public School Employees’ Retirement System alone will grow an estimated $6.6 million; increased spending on salaries will add $5.5 million more.

District financial staff already have begun looking for ways to tighten the belt in next year’s budget.

“We're going to look at our staff, we're going to look at our spending — not that we don't do that on an annual basis, because we do," Frisbie said.

"But we can't be the status quo. We are now in a position where we have to change."

No big item to cut to 'save the day'

The district may find opportunities to defer non-urgent maintenance, make small across-the-board spending cuts, eliminate unfilled positions and revisit planned capital spending.

“There is not one big line item we can just cut to save the day,” Frisbie said.

The district will cover any deficit left in its final budget using money from the district’s fund balance.

Of course, no district can rely on drawing down their fund balance forever. If recent trends continue for the next few years, Parkland will need to make large, sustained budget cuts and consistently increase taxes.

Parkland’s school board must first decide whether it intends to ask voters for a tax increase higher than the state-set Act One Index cap.

The newly sworn-in school board likely will consider that in January.

In April 2026, the district will hold a budget seminar before locking in a budget proposal in May. The school will hold a final vote on the budget in June.