AllentownSchool District

Five-Year Financial Projection from PFM for the Allentown School District

Five-Year Financial Projection from PFM for the Allentown School District
Posted on 01/27/2022

Allentown, PA — On January 27, the Allentown School District held a special finance committee of the whole meeting to release the updated 5-year Financial Projection from Public Financial Management Co. (PFM).


Since PFM’s initial baseline financial projections in February 2021, the district has made great strides that reflect its commitment to and prioritization of fiscal stability. This latest report concludes that the district has improved its financial position since the prior report, but also notes ongoing revenue and cost challenges. It also provides information related to a one-time influx of federal funding through the American Rescue Plan’s ESSER funds.


Over the past year, ASD has used additional short- and long-term revenues to close its projected deficit, but costs continue to rise for major budget drivers like salaries, benefits, and charter school tuition. Since the start of the pandemic, the district has prioritized investing in technology for staff and students, and improving air quality in the buildings in order to create the safest possible environment. 

“Collectively, the efforts that district staff have made over the last few years have increased organizational efficiency, transparency, and accountability. However, we know that difficult work remains,” said Dr. John Stanford, Superintendent. “Our district—like most others in Pennsylvania—continues to experience cost increases and uncertain funding streams that place continued stress on our budget.”

Although federal ESSER funds have provided the ASD with a significant increase in available resources, they are one-time funds that will expire within the next two years. To date, ASD has allocated approximately $25.7 million of its ESSER funds for use in maintaining district operations during the current and previous school year. Approximately $116 million (82 percent) remains to be allocated over the next three years. 

Despite this temporary influx of federal revenues and additional state education aid in the current school year, a structural deficit remains in the district’s financial horizon. PFM’s analysis projects a $15.7 million deficit in the next budget year, growing steadily over the remainder of the forecast period.

It is unclear how factors such as current fair funding litigation or Pennsylvania’s education aid will affect available funds for ASD in future years. The district’s charter school tuition costs are driven by both increasing charter school enrollment and growing tuition rates. Projected charter school tuition cost growth alone accounts for nearly half of the projected increase in district expenditures over the five years of baseline projections, according to the PFM report.

The update has been shared publicly for transparency and review under Departments> Finance and can be found here The district remains committed to continuing to provide a high-quality education to every student in the Allentown community.