Budget (Credit: Lukas Blazek / Unsplash.com)
It is already that time of year to begin planning ahead.
School may just be getting into its routine of this fall, but that doesn’t mean the school board isn’t looking ahead. In fact, the Hatboro-Horsham School Board Meeting on Oct. 21 included a first look at the 2025-26 Budget Development plan for the district.
Bill Stone, the district’s director of business affairs, presented the district’s budget priorities to refresh both the board members and the public of its goals and strategies.
“It is hard to believe that in October, we are beginning the budget process, but it is important that we get started on such a critical part of the district’s operation,” said Stone.
Stone explained the approach the district takes to remain fiscally responsible. He said that in the 2007-08 school year, the state of Pennsylvania adopted the Act I Index, which limits the amount any state district may increase taxes by in a given school year. Stone said the district has never exceeded the state limit, nor applied for any exceptions the entire time the Act I ruling has been in place.
“[The district] has adopted an approach of keeping that tax increases below that Act I Index level,” said Stone. “And that strategy has been very fruitful for our financial position.”
The 2025-26 Act I Index has already been certified by the state to be set at 4%, which is down from the prior year’s 5.3% allowance. The 2024-25 number was the highest that had been allowed in the history of the index.
Stone said that the Act I Index is projected to decline in the coming years, reducing the amount of tax increases that can occur. He said that projections have estimated the figure slowly dropping until 2028-29 when it tapers at around 3.2%.
When it comes to millage in the school district, Stone said Hatboro-Horsham remains below average at 33.8.
“Our fiscal strategy has proven sound that we’re in the lower end of the county,” he said. “We’re comparable to those districts noted in green.”
The “green” coded districts included:
Those districts have a “Triple-A Bond Rating” which Stone said is where HHSD is “striving to be” with its credit rating, too.
“Our credit rating is Double-A One, higher than most of our peers in the county,’ said Stone. “That also helps to make our debt services cheaper when we do have to borrow money for those significant projects.”
The director of business affairs added that the strategy used in the prior years has also permitted a continued growth in the General Fund balance.
Since 2017, the funds have increased steadily, year-over-year, up to and including the 2024-25 year in process, though the figures for this year have not yet been finalized by auditors.
“This also allowed us to maintain other funds to offset future expenditures,” said Stone. “For example, capital reserve funds to be able to do summer maintenance projects, and the debt service fund to help us offset increases in debt service when we do significant projects, such as the Keith Valley Middle School Project.”
Stone explained that the state and federal funds are a smaller percent of the district’s overall budget which relies heavily on local sources (i.e. residents’ tax dollars). While the hope is to increase General Fund savings, there is a built-in projected 5% reserves slated for the upcoming year, should the funds be required.
“It has been the board’s practice to budget for about 5% use of reserves,” said Stone. “The board does anticipate using those [reserves] in each budget process, and we hope that through better news than anticipated, we do not need to use those reserves, and we can continue to replenish funds to the balance.”
Calling the district a “people-centered organization,” as a majority of costs in the budget are dedicated to those that make the district work. He also said that, while it may sound unusual from a business director, the upcoming year did include “some optimism here.” 
Image courtesy of HHSD
“Don’t worry, I will bring a little pessimism shortly,” he joked.
Stone said that continuing to work smoothly with the teachers’ unions, support staff, and Act 93 regulations, the district is able to keep its largest costs (staffing, benefits, and “people”) efficient. Additionally, with a “need-based” budget approach, he said, Hatboro-Horsham can maintain balance in spending.
He said the upcoming year’s challenges will include updating an Enterprise Resource Planning system conversion. This financial and human resource software is a necessary update to the district’s current systems, and Stone said staffing is prepared to handle the change.
“We hope that that will allow us to become a more efficient operation,” said Stone. “But we do recognize that the change will be a significant investment of time and an investment of future for the district.”
Both the opening of the Keith Valley Middle School and the district administrative office are other challenges for the budget, as funds are necessary to be set aside for both initiatives. Stone said, however, that the board’s history of a focused budget, based on its core values, keeps a balance. He reminded the board members that all conversations of the budget are to remain with a HHSD student focus at the center.
Image courtesy of HHSD“We really do strive to keep students at the center, making sure that that question is asked when making a decision whether to add or change or subtract a program,” said Stone. “We make sure that we consider the impact to the classroom.”
Following state governed deadlines of the process, the district will continue its process, following the night’s review of the Act I Index and budget priorities, with a Dec. 16 deadline to approve the Act I Index level by adopting a resolution to not exceed its limits, next on the timeline.
“We will, over the next several months, have opportunities for discussion around the board level, as well as for public input, both at work session meetings and legislative action meetings,” said Stone.
An approved final budget presentation is slated for April 28, 2025, while May will include budget updates and changes. On June 2, 2025, the final budget will be presented for discussion, with a vote to approve a final budget scheduled for June 16, 2025.
