Projecting a budget deficit, this Centre County school district wants feedback
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- The Philipsburg-Osceola district wants community feedback as it faces financial trouble.
- Community members can share their thoughts until 3 p.m. Wednesday, Feb. 18.
- Officials project a $1.19 million deficit for the 2026-27 year that could worsen.
The Philipsburg-Osceola Area School District wants to hear from the community as it wrangles with an expected budget deficit.
The district, which spans both Centre and Clearfield counties, is projecting a budget deficit of roughly $1.19 million for its 2026-27 school year, Superintendent Daniel Potutschnig wrote in a letter to families. Administrators are considering a range of options, including reducing expenditures, adjusting staffing and raising taxes, to address Philipsburg-Osceola’s financial challenges.
To inform that process, the district has launched a form to gather feedback from taxpayers and community members. Prospective respondents can access the form by visiting the district website or obtaining a paper copy at the Philipsburg-Osceola district office at 200 Short St. in Philipsburg.
The online questionnaire will remain open until 3 p.m. on Wednesday, Feb. 18. Respondents are asked to share how they feel about potential tax increases and what they believe would be the best solution for the community if a tax increase is not approved, such as potentially reducing staffing in schools or cutting programs and services.
“We encourage eligible community members to take a few moments to complete the survey and share their perspective,” Potutschnig wrote. “Community input is an important component of the district’s decision-making process as we plan for the upcoming school year.”
Philipsburg-Osceola’s district is expected to provide presentations on its revenues and expenditures at its school board meetings in February and March, respectively, according to a tentative timeline posted online. The district’s school board could provide preliminary approval for its next budget in April before finalizing the budget in May.
Status quo is ‘not an option’
The Philipsburg-Osceola district may need to take drastic actions to avoid significant budget shortfalls in the near future, officials said at January’s school board meeting.
While planning for the 2026-27 budget, district officials expect a flat increase to state funding and no increase to federal funding, Potutschnig said. Local revenues are likely to remain flat or increase by about 1%, while utility rates and transportation costs are expected to increase by 2.25% and 3.25%, respectively.
The district attempted to get ahead of the curve by leaving several positions unfilled during the 2025-26 school year, including posts for a maintenance worker and crossing guard. Others, including positions for a science teacher and elementary-level teacher, were filled internally, while a head cook position was downgraded from a full-time to part-time role.
Those moves, including a 4.1% tax increase, have helped the district manage its roughly $39.3 million budget for the 2025-26 school year. But additional planning is required to avoid dire financial shortfalls as soon as the 2027-28 school year, district officials said.
Maintaining the status quo — or simply not taking action — is not an option, according to Potutschnig, who estimates the district would essentially become bankrupt as soon as the 2027-28 school year in such a scenario. Current projections suggest the district’s deficit could reach $4.44 million by the 2029-30 if no changes are made.
Continued investments in the district’s general fund balance and other maneuvers, including potential tax increases, are required to balance future budgets and achieve a surplus.
The superintendent presented several scenarios to the Philipsburg-Osceola school board at its Jan. 26 meeting, including options to raise taxes next year by as much as 4% or 4.5%. But tax increases alone will not eliminate projected deficits, Potutschnig said.
The district will likely need to consider a combination of tax increases and personnel shakeups, including offering incentives to employees who could voluntarily resign or retire. Board members were less receptive to a more drastic option that would instead furlough roughly 12 of the 280 positions across the district.
Potutschnig said he hopes the school board, using feedback gathered from the community, can plan ahead to put the Philipsburg-Osceola district on the right path toward financial stability.
“This is only step one of a multi-year plan to get us to where we need to be as a fiscally healthy district,” Potutschnig said. “It can’t be done in one year.”
Though achieving a healthy budget is the overarching goal, Potutschnig said the district must also work to put money aside for future capital projects, including roof repairs and maintenance of its athletic fields. The district has neglected those efforts in recent years.
Richard Wood, the school board president, said during last month’s meeting that taking action now will put the district in a better spot to make additional budgetary decisions down the line.
“Hopefully, it’s not as bad next year. That would be our hope,” Wood said. “If we do the right things now, it should get a little better each year. It’s not going to go away overnight.”
Philipsburg’s financial challenges arrive as the district weighs its educational future. Officials previously shared early plans to potentially restructure its educational services to counter declining enrollment, which has dropped by roughly 9.35% since the 2015-16 school year, according to Pennsylvania Department of Education data.
The district has already ruled out a proposal that would have devoted Philipsburg Elementary School as a dedicated building for kindergarten through the second grade and moved instruction for the third through fifth grades to Osceola Mills Elementary School. Another plan that would have moved fifth grade instruction back to Philipsburg-Osceola Middle School is also off the table, Potutschnig said.
Other scenarios that could shuffle staffing and class sizes throughout the district remain under consideration. Those proposals are available on the district’s website.
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