EMMAUS, Pa. – The East Penn School District Board of Directors received an update Monday on the district’s long-range fiscal and capital plan.
According to Robert Saul, the district’s business administrator, EPSD is projecting a widening structural deficit over the next several years, even with annual property tax increases at or near the state limit.
District officials estimate a preliminary budget gap of about $2.14 million for the 2026-27 school year, according to the plan presented Monday.
Saul said district administrators have already identified potential adjustments that could close that gap as the budget process continues.
Current projections show the deficit could grow to nearly $9.87 million by the 2030-31 fiscal year, eventually driving the district’s general fund balance into negative territory if no corrective actions are taken.
The projections are intended as a baseline model and do not include potential spending cuts, revenue changes or policy decisions that may occur as the annual budget is developed.
The long-range fiscal and capital plan is designed to guide financial decisions and provide a forecast of revenues, expenses and reserve levels based on historical trends and existing labor agreements.
District officials said the document should be viewed as a “living plan,” noting that factors such as state funding formulas, health care costs and economic conditions can significantly alter projections.
Next steps include reevaluating the 2026-27 budget and bringing recommendations back to the board on how to close the projected $2.14 million gap, Saul said.
Among the largest drivers of projected spending growth are employee benefits, specifically health care costs.
Wages represent 42% of the district’s total expenditures, while benefits account for 30%, Saul said. When transportation and charter school costs are included, that share rises to more than 80% of spending.
EPSD employees are expected to receive 3.81% wage increases in next year’s spending plan. Saul said the budget contains “no staffing expansions or reductions embedded in this proposal.”
Health insurance costs have increased significantly beyond typical levels, Saul said. Over the past 12 years, rate increases for the district’s health care consortium averaged about 6.2%. This year’s rate increase is 17.75%.
Group insurance expenses are expected to rise sharply from about $20 million in the 2025-26 school year to roughly $38.3 million by 2030-31, driven by a medical cost trend estimated at nearly 11.8% annually, according to the report.
Salary expenses are also projected to increase as a result of existing labor contracts with teachers, administrators and support staff.
Revenue growth is expected to rely heavily on property taxes.
For the 2026-27 school year, East Penn’s maximum allowable tax increase under Pennsylvania’s Act 1 index is 4.10%.
District estimates show that an increase at that level would raise the annual property tax bill by about $194 for the average assessed home currently valued at $216,367 in the district.
The plan assumes taxable property assessments will grow about 1.04% annually, while future tax increases remain at or below the Act 1 index.
Overall district revenues are projected to increase from about $202.3 million in 2026-27 to $239.5 million by 2030-31.
However, expenses are expected to grow faster, rising from approximately $214.7 million to $261 million over the same period, creating larger budget gaps over time.
As deficits accumulate, the district’s total fund balance, which is currently about $26.8 million, would steadily decline.
Under the current model, the balance could fall to about $6.7 million by 2029-30 and become negative the following year.
District officials said the projections assume no corrective measures are taken and are meant to illustrate the financial trajectory the district faces as it develops future budgets.
The plan also emphasizes maintaining educational program quality, managing tax increases responsibly and preserving reserves for unexpected costs such as infrastructure repairs or enrollment changes.
School officials said the projections will be refined as the 2026-27 budget process continues and new financial information becomes available.
iPads and screen time
In other news, the board tabled a vote on the lease purchase of more than 3,500 Apple iPads for elementary-level students and teachers.
The measure, calling for a $1.2 million contract running until 2029, prompted significant discussion among board members regarding screen time for the district’s youngest learners on Monday night.
According to Superintendent Kristen Campbell, data show K-2 students use their devices about 40 minutes per week for math and English language arts during a typical school week.
Students at the intermediate level can reach up to 50 minutes per week per subject area, she said.
Campbell said the devices allow for individualized learning, as student activities are geared toward their learning levels and can also benefit students receiving special education instruction.
“The vision is that the technology purposefully enhances learning and instruction,” Campbell said.
Campbell said she understands concerns among parents and community members regarding screen time for young students.
Board member Bill Whitney said he appreciated the reasons why a one-to-one device program makes sense from a standpoint of instructional ease and convenience.
Whitney said he would like to hear additional feedback on the impact of devices on learning.
“I remain pretty unconvinced that it is essential for us to provide devices to our youngest learners, K-2,” Whitney said.
Campbell said many instructional resources are accessible online, which has become a common instructional model.
“We’re putting technology in the hands of teachers and allowing them to purposely design instruction in their classroom and their models in terms of how and when that tech use is going to be most beneficial to student learning,” Campbell said.
Board member Jeff Jankowski said he wanted to examine the devices’ impact on learning more closely, believing the subject warranted “more than a perfunctory vote.”
Board President Shonta Ford voted against tabling the measure.
Guidance plan
In other business, the board voted to adopt the 2026-29 Chapter 339 K-12 Guidance Plan.
The Chapter 339 plan requires Pennsylvania school districts to ensure students are exposed to career awareness and planning from elementary through high school so they can make informed decisions about postsecondary education or entering the workforce.