With the state’s budget impasse now past the 100-day mark, Knoch School District has to contemplate what to do if it lasts much longer.

Even though Knoch School District feels it can rely on local tax revenue through the end of December, the absence of state funding poses serious questions surrounding finances. Jamie Van Lenten, Knoch’s business manager, said her district has been supported by tax revenue that’s come in recently, but questions remain beyond that.

“Typically, we receive a lot of our local revenue from local real estate taxes through December. Whenever I compare our revenue from last year to projections of this year, the local revenue is relatively the same,” Van Lanten said.

But the dropoff in state funding is obvious. Van Lenten said in the first quarter of last school year, her district received $3.7 million in state funding. In the first quarter this year, it has only received $552,000.

In the second quarter of last school year, Knoch received $5.6 million in state revenue, Van Lenten said. For this year, she said it’s projected Knoch would only receive around $600,000 in state funds for the second quarter if the budget impasse continues.

When Knoch School District approved its budget for the 2025-26 school year back in June, it expected roughly $17.3 million in revenue (out of $39.3 million) to come from state sources.

Elsewhere in Butler County, other schools have already openly said they’re looking into taking out a loan — a tax anticipation note — if the impasse continues much longer. Butler Area School District’s superintendent, Brian White, said his district will start the process in November if the budget is not resolved. Meanwhile, Karns City Area School District’s superintendent, Eric Ritzert, said his district is also looking into the possibility.

Van Lenten said she feels comfortable about the district’s finances in November and December. After that, she has concerns. Knoch would “look at its options” if there’s no budget by the new year.

“The bottom line, taking a look at our cash flows, the fist quarter has allowed us to stay the same on our revenue and expenses, the second quarter, you’re starting to get a bigger gap,” Van Lenten said. “And then after December, that’s when there will start to be real concern if we don’t see any state funding.”

The ongoing impasse is due to the Democratic-led state House of Representatives and the Republican-led state Senate, along with Gov. Josh Shapiro’s office, failing to agree to a state budget for the 2025-26 fiscal year.

When asked by the board what the loans looked like, Van Lenten said at the board meeting that other school districts across the state who have taken out loans by this point are often paying an interest rate of around 6%. The interest accrued is not reimbursed by the state.

Van Lenten said the district would try to use portions of what’s save up in the school’s fund balance before taking out a line of credit.

The budget impasse update, one of several the board has received in the past couple months, left board members wondering out loud what the hold up was.

Van Lenten said the Pennsylvania School Boards Association has sent out letters to state senators and representatives explaining how the impasse is affecting schools.

But the school boards association has not been receiving good signals from the state thus far.

“The last information that I got from PASBA is that there’s not an end in sight,” Van Lenten said.