The Pleasant Valley School District is bracing for $5.8 million budget gap and another possible tax increase of up to 4.7%.

Business director Michael Simonetta broke the bad news during the school board meeting Thursday night.

It’s still just a preliminary budget, and the school board did approve offering retirement incentives to teachers.

School board director Laura Jecker said the incentive is for teachers who have been with the school district for a long time and qualify for retirement.

Jecker said their retirement “helps with our funding and salaries.”

The district can save money by hiring new college graduates at a lower salary, because teachers who have been with the district for many years are making higher wages.

“It also helps with us having to furlough less people, so thank you to the teachers who are leaving the district after their years of service,” Jecker said.

Simonetta said the district has seen shortfalls this school year, because it did not budget enough to cover expenses. One of those being for charter schools.

The school district assumed that 60% of the students in outside charter schools during the 2020-2021 school year would return to the bricks and mortar district buildings this school year. They didn’t. Only 40% of the students returned.

School districts in Pennsylvania are required to pass on to charter schools money from the state for each child in the school district that is going to that charter school.

The amount that a school district pays varies from one school district to another. According to the Pennsylvania Department of Education’s spreadsheet on charter school tuition rates for 2021-2022, Pleasant Valley School District pays $15,810.97 per non-special education students to charter schools. The district pays $34,934.93 per special education student.

The school district’s enrollment report on Jan. 26 stated there were 426 students in outside the district cyber charter schools, and 16 in bricks and mortar charter schools. If all of those 442 students are non-special education students, then the cost to the district would be a minimum of $6.9 million.

The district also did not budget enough in the 2021-22 budget for its contributions to the Elementary and Secondary Emergency Relief Fund. There was a shortfall of $1.5 million for salaries and $1 million for transportation.

Simonetta said the school district could consider a tax increase of 2.7% or up to 4.7%. For a property valued at $139,000, the 2.7% increase would add $89 to the bill and bring the total up to $3,362. The 4.7% increase would add $154 to the bill with the total being $3,428. The district would yield an extra $1 million with the 4.7% increase over the 2.7% increase.

The next step for the district is to identify areas where the budget can be reduced, Simonetta said. This is difficult because 73% of the budget is fixed costs with salaries being 38% of it, employee benefits being 26%, and 9% to charter schools, MCTI and other programs. Of the remaining amount, 24% is somewhat fixed, he said. It covers insurance premiums, fuel costs, utilities and other bills. Only 3% is free to cut. Whatever is cut, it won’t be programs, he said.

“Sorry for the gloom and doom, but I think we need to keep updated and understand where we’re at and the challenges ahead,” Simonetta said.

A proposed budget could be available by April 21 or May 21, but has a deadline of May 31. The final budget would then be passed on June 9 or 23, with a state required deadline of June 30.