MECHANICSBURG – Mechanicsburg Exempted Village Schools officials predict decreasing revenues over the next five years, though any shortfalls should be covered by cash reserves.

The Mechanicsburg school board approved the district’s five-year forecast at its Monday meeting. The forecast is required by state law to be developed in May and October each year.

The forecast predicts the district’s revenue to end the current fiscal year at $10,344,052 and next school year at $9,857,342. Revenue is estimated to decline to $9,764,373 in the 2020-21 school year.

The revenue declines are predicted largely due to state funding, Treasurer Scott Maruniak told the school board. The latest state budget proposal is estimated to reduce funding to the district by $250,000 in fiscal years 2017-18 and 2018-19, and Maruniak said he expected that would be part of the rest of the forecast. Part of the issue comes from how the state measures student attendance. Mechanicsburg instituted programs that make it look like it is losing students, but the attendance is the same as prior years.

Expenses are estimated to end the current school year at $9,271,725 and next school year at $9,916,727. Expenses are estimated to increase to $11,656,654 in the 2020-21 school year.

Expenditures are estimated to increase due to increasing staff salaries and other employment costs, such as health insurance, Maruniak said. Though the district’s health insurance increases have been modest as a result of rate holidays from new providers, he could not predict those rate holidays would continue. The forecast predicts a 10 percent health insurance cost increase each year from fiscal years 2017-18 to 2020-21.

The forecast predicts the district will end the current school year with a $1,072,327 surplus and next school year with a $59,365 shortfall. The deficit is estimated to grow to $1,892,281, but that would be covered by cash reserves.