Methacton Warriors
With a special education exception, the board can avoid a voter referendum to go over the 4.0% millage rate limit.
Citing an increase in special education needs, thus avoiding a voter referendum, Methacton Board of School Directors voted 7-2 Tuesday to move ahead a proposed $139.8 million preliminary 2025-26 budget with a 5.1% real estate tax increase, which is 1.1% over the current Pennsylvania Department of State-mandated Act 1 Index.
The vote also authorized district administration to apply for the special education referendum exception, permitted under Act 1, for the millage overage.
Directors Kate Graf and Cathy Cleary voted against the preliminary budget.
“Based on conversations of the Board, and based on past several meetings we’ve had, we really have to have the administration and Board work together to work out the programming needs of the district and work on fiscal responsibility to the public,” said Board President Jen Cancro. “We need to work to get the millage rate down to a level where it is acceptable.”
Act 1 of 2006, also known as the Taxpayer Relief Act, limits a school district’s ability to raise its millage rate from the previous year by no more than the established Index set by the state Department of Education.
For the 2024-25 Fiscal Year, the Act 1 Index was set at 5.3%. It is back to 4% for 2025-26, meaning Methacton is limited to increasing its millage by more than 4% without an exception or a referendum vote.
One such exception is Special Education services. Methacton qualifies for a Special Education Exception due to increasing costs with its special education program.
Methacton has remained below the Act 1 Index for seven years.
Superintendent Dr. David Zerbe said the preliminary budget is an initial look at what the administration has put together, in terms of expense and revenue assumptions for 2025-26.
“In some years, it was determined we generally look at the Act 1 Index as the limit for which we would have to raise taxes,” Zerbe said Tuesday night. “In other years, we had to file special education referendum exceptions. It is not a final budget for what the board is enacting. Assuming it’s passed, the board is allowing administration to apply for special education exception going above the Act 1 Index.”
The district will use some of its fund balance to tighten the gap.
“A balanced budget presented to the board required more revenue than 5.1% would provide, and the district would have to use fund balance temporarily as part of a process,” Zerbe said. “I’m not saying we would or wouldn’t use it as a final part of the budget.”
At present, the preliminary budget shows a $2.09 million shortfall at the current Act 1 Index limit. Steffy had presented a Special Education Exception of 6.3%, which would increase a typical homeowner’s tax bill by $380.
Through the Finance Committee, the increase was brought down to 5.1%.
On Jan. 28, the board voted 6-2 to authorize administration to make available for public inspection the proposed preliminary budget.
Zerbe said the passing of the preliminary budget with the proposed tax increase is part of the Act 1 process when the rate is higher than the index.
The proposed preliminary budget was presented to the board on Jan. 21 by Director of Business Services Kimberly Steffy.
View the presentation here.
During the presentation, Steffy showed how actual special education third-party support services costs have increased 248% over the past four years. Costs in 2023-24 were $7.03 million – but the district only budgeted $3.86 million. In the fiscal year prior, $3.3 million was budgeted, but actual costs were at $6 million.
The 2024-25 budget thus had a $6 million expense projection. Steffy said other purchased services – tuition to nonpublic schools, charter school tuition, and Intermediate Unit expenses – increased 56% over the past four years.
At present, the preliminary budget projects $7.12 million in third-party services costs for 2025-26, taking into account the actual spend in 2023-24, Steffy said.
According to Zerbe, the budget is generally presented within or slightly over the Act 1 Index as a first look.
“As part of the regular budget process, we began meeting with principals and directors to establish a baseline of requests. In doing so, we received the 2025-2026 Special Education budget requests that were significantly more than 23/24 actual,” Zerbe is quoted in a recent Methacton School District Board meeting review bulletin. “Given a review of these requests and the fact that we have overspent in Special Education the past few years, it is clear that greater review of these budget requests, program operations, and other associated matters are required to determine the special education budget and ultimately the district budget for the Board’s consideration.”
Now, administration has been tasked by the Board to bring the budget to an acceptable state and a millage rate below 4%.
Zerbe told the Board work includes reviewing the projected revenue and expenditure assumptions, reviewing special education operations, programs and services, and reviewing all third-party services contracts. He said the budget will be a standing discussion item for the district Finance Committee, along with monthly updates to the full board on progress to a final budget approval in May.
One resident from Lower Providence Township said “the budget should be rejected because it contains a $1.1 million plug.”
“It’s not a fund balance; it’s a plug,” he said. “Nothing has been done over the past month to close that gap.”
He advised the board not to look at the figures as budget-to-budget, but as actual-to-forecast.
“Why are special education costs so far overbudget? Nobody said anything. Are we throwing good money after bad?” he said. “There was a lot of discussion about the ability to build a new high school and have a tax increase equal to Act 1 or less, and out of the gate, three months later, you show up with a 6.3% tax increase?”
Board Director and Finance Committee Chair Paul Winters said the money was a plug.
“The 5.1% is because I pulled it out of my tookus,” he said. “Obviously, we were not going to get five votes for 6.3% and I had to come up with something, somewhere between 6.3% and 4.0%, and it passed,” Winters said. “I welcome anybody to participate in any of these meetings and suggest how to drive down to 4% or lower.”
