Although the coronavirus pandemic has caused a $779,000 deficit in next year's proposed South Butler County School District budget, no tax increase is planned at this point.

The school board voted 8-1 during its Wednesday night virtual meeting to pass the $36.6 million 2020-21 tentative budget, which displays the fiscal black eye caused by the pandemic.

George Zacherl cast the dissenting vote.

The main reasons for the deficit are the sharp decreases in revenue expected as a result of the economic impact of the pandemic.

A $119,000 decrease in real estate taxes from furloughs and other conditions that render residents unable to pay their taxes, a $107,000 drop in the interest and investment earnings line item cause by the federal reserve dropping interest rates, a $222,000 decrease in earned income tax also caused by furloughs, and the lack of real estate transfer taxes rolling into the district due to a decrease in home sales during the pandemic are the main reasons for the deficit, said Pam Mondock, district business manager.

To help buffer the negative number, Mondock said various expenses were decreased.

She asked principals and department heads to shave their expenditures.

Line items in the proposed budget's expenditures include $115,000 less spent on purchasing services, $186,000 less in equipment purchases and miscellaneous expenses down by almost $82,000, Mondock said.

David Foley, superintendent, said no courses or programs were cut in the preliminary budget.

“We're looking at all of the options for the start (of school) in the fall,” Foley said. “It's too early to tell.”

Foley said while the board planned to use the unassigned fund balance of $1.2 million for various upgrades and renovations in the district's four school buildings, some of that money might now have to be moved to the general fund to balance the budget.

“There are challenging times ahead,” Foley said.

Roof replacements, resurfacing parking lots and upgrading academic labs were the main projects planned for the unassigned fund balance, Foley said.

The board also must decide whether to float a bond to help pay for the extensive repairs, Foley said.

While the bond market interest rates are extremely low due to the pandemic, the board must determine if now is the right time to take on debt, he said. “The board was eager to dig into the projects, knowing we are trying to match academic programs with the needs of students,” Foley said. The school board must vote on a final budget by June 30.