Derry Area School District Approves 2026–27 Budget Without Tax Increase

The Derry Area School District board has approved its 2026–27 budget, marking the sixth consecutive year without a tax increase. The plan was finalized unanimously during Thursday’s meeting, continuing a trend of relying on reserve funds to balance expenses.

The district expects to generate approximately $42.2 million in revenue while projecting total expenditures of about $45.8 million. To close the gap, officials plan to use $3.6 million from the fund balance. Since the 2019–20 school year, the district has significantly increased its reliance on these reserves, with usage rising by roughly 151%. During that same period, the fund balance itself has grown by about 126%.

Business Manager Scott Chappell noted that the finalized budget is largely unchanged from the version introduced in May, though projected expenditures have decreased by $166,010. He attributed the reduction primarily to adjustments in student placements and updated projections for special education costs.

Of the total budget, approximately $25 million is allocated for instruction, $13.3 million for support services, $6.37 million for other expenditures and financing uses, and just over $1 million for non-instructional services.

Compared to the current school year, the new budget represents an increase of nearly $1.8 million. Chappell explained that much of that rise—about $1.16 million—is due to a temporary spike in debt service. The district is managing costs associated with new renovation bonds while still paying off earlier construction projects.

Personnel expenses remain the largest portion of spending, with salaries and benefits totaling around $24.5 million. Special education is another major cost driver, projected at about $6.4 million. Over time, these expenses have continued to grow despite declining overall enrollment.

Over the past decade, district enrollment has dropped by roughly 158 students. However, the number of students with Individualized Education Programs has increased by 44, representing a 4% rise. Chappell said special education costs have grown by an average of $300,000 annually since the 2021–22 school year and have increased by more than 39% since 2016–17.

While expenses continue to climb, state funding has not kept pace. Special education subsidies from the state have increased from about $1.6 million to $2.1 million, a gain of $470,000 that falls short of covering rising costs.

State funding overall accounts for about 55% of district revenue. However, delays in passing the state budget remain a concern. Only nine of the last 25 state budgets have been approved by the June 30 deadline. Chappell emphasized the importance of maintaining a strong fund balance to manage periods when state funds are delayed.

Superintendent Greg Ferencak added that if the state budget is late again, the district could lose up to $30,000 per month in investment interest. He urged residents to advocate for timely action at the state level to avoid financial strain on local schools.