Mahanoy Area School District officials say they’ve been forced to take out a loan to “maintain essential cash flow” due to the ongoing state budget impasse.
On Wednesday, school board members at Mahanoy Area unanimously approved taking out a short-term $6.9 million tax anticipation loan. The district says this loan is necessary because it has not received its expected state funding for the 2025-26 budget year.
The cost of this loan is estimated to be $7,000-10,000. School officials say the school has also incurred at $13,000 hit in lost interest earnings on its fund balance due to the lack of state funding.
District Business Manager Jack Hurst explains to The Canary that Mahanoy Area had to draw money down on its fund balance that’s normally earning interest through the school year.
Hurst said of the $6.9 million loan presumes the state budget will be passed by February.
And in addition to the costs incurred by taking out the loan itself plus the lost earned interest, this loan will cost Mahanoy Area about $395 per day in interest, or about $12,000 in November.
Hurst said the district plans to draw down on that $6.9 million as little as possible until the budget stalemate in Harrisburg is resolved.
About 70% of Mahanoy Area’s funding comes from state sources. In the 2025-26 budget, Mahanoy Area expected $18.3 million of the total $26.2 million it will spend this year to come from state sources.
“For schools like Mahanoy Area that rely as heavily on state funding, the budget impasse affects us more than schools that rely less heavily on state funding,” Hurst tells The Canary.
Mahanoy Area School District – Revenue from State Sources
| Description | Amount |
|---|---|
| Basic Education Funding – Formula | $10,647,331 |
| Special Education Funds for School-Aged Pupils | $1,511,707 |
| Pupil Transportation Subsidy | $575,000 |
| Nonpublic and Charter School Pupil Transportation Subsidy | $20,000 |
| Rental and Sinking Fund Payments / Building Reimbursement Subsidy | $27,179 |
| Health Services (Medical, Dental, Nurse, Act 25) | $21,356 |
| State Property Tax Reduction Allocation | $749,160 |
| Sewage Treatment Operations / Environmental Subsidies | $350,594 |
| Safe Schools | $93,732 |
| Ready to Learn – Foundation | $626,474 |
| Ready to Learn – Adequacy Supplement | $398,235 |
| State Share of Social Security and Medicare Taxes | $592,180 |
| State Share of Retirement Contributions | $2,699,759 |
| Total Revenue from State Sources | $18,312,707 |
“We are deeply disappointed that our students and staff are being impacted by legislative inaction,” Superintendent Joie Green says. “Our priority remains providing a safe, high-quality learning environment, but the lack of funding forces us to make difficult financial decisions that no school should have to face.”
The district is urging state legislators to pass a budget to ensure adequate funding of all public schools. Legislators missed their June 30 deadline to pass a state budget for the fiscal year beginning July 1.
“The school community remains hopeful that a resolution will be reached soon to prevent further costs to our taxpayers,” Mahanoy Area says in a statement.
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