Pennsbury To Look At Ways To Manage Costs

With rising operational costs and declining student enrollment, the Pennsbury School District is moving to take a closer look at its fiscal planning ahead of the 2027-2028 budget cycle.

At the August school board meeting, Superintendent Dr. Thomas Smith cautioned that the district — which serves Falls Township, Lower Makefield Township, Tullytown Borough, and Yardley Borough — has to prepare for upcoming financial hurdles.

“We are going to be facing some budget challenges moving forward,” Smith said. “These are driven by increasing costs in healthcare and contract increases in special education costs.”

In June, the school board passed a $278.4 million budget for the 2026-2027 school year, which included a 3.5 percent property tax increase and is expected to draw approximately $4.4 million from reserves.

Smith said the reliance on reserve funds to balance the books is not sustainable.

“That’s no way to build a budget moving forward,” he said.

Staff salaries and benefits represent the largest portion of district expenses, making up 75 percent to 80 percent of spending. Pennsbury currently employs 1,700 staff members and serves 9,600 students across 15 facilities.

Most employee contracts are secured through 2030, a move intended to keep personnel costs predictable while construction proceeds on a new $269.5 million high school that is slated for completion in 2029.

Looking past staffing costs, district officials have faced increased utility expenses, inflation, and growing special education needs as ongoing pressures.

Kimberly Steffy, the district’s chief financial officer, recently alerted board members to potential structural deficits in future years.

Taxes are already projected to rise to help fund the new high school construction in the coming years.

Officials are working on a comprehensive plan for other infrastructure maintenance and replacement at Pennsbury’s facilities.

With enrollment dropping, Smith explained that administrators will evaluate budget cuts, staffing adjustments, and school rebalancing as part of the fiscal planning process.

The district has hired a demographer to guide potential redistricting to balance student populations across schools while maintaining targeted class sizes and staffing ratios, Smith said.

Starting with the 2027-2028 budget year, Pennsbury will switch to zero-based budgeting and require every expense to be justified from scratch rather than relying on prior spending baselines.

“We’re challenging our historical spending,” Smith said, adding that the assumption that prior-year expenses will automatically roll over into the next budget is no longer guaranteed.