"If the board doesn't want a 6-mill increase next year," he said the board must begin thinking now about what personnel and programs to trim.
One of the unknowns is what level of increases the district will see in state subsidies next year, Vensel said.
"Obviously, I don't know what the subsidies are going to be for this year," he said.
The Pennsylvania General Assembly and Gov. Ed Rendell have yet to agree on a funding formula for the state budget year that began July 1.
The state also has to decide whether there will be a tax reform package for schools. Rendell wants to reduce local real estate taxes, offsetting the loss of revenue by substantially increasing the state's earned income tax and using the extra revenue to boost public school funding.
Real estate taxes are expected to generate $20.9 million of the district's $62.5 million budget this year. The state's basic educational subsidy to the district is projected at $16.3 million and local earned income tax at $4.5 million.
Vensel's predicted growth in both the real estate revenues and real estate taxes at anywhere from 2.5 percent to 3.5 percent, while his range for earned income tax growth is 2 percent to 4 percent.
With all sources of revenue figured in, Vensel estimated revenues for next year of between $67.5 million and $68.6 million. Expenditures, however, will range from $70.2 million to $73.4 million, meaning the district could be looking at closing a gap of between $1 million and about $3.4 million.
Health-care costs and retirement plan contributions are two of the biggest variables. He told the board health-care costs could go up between 20 percent and 30 percent and a move by the General Assembly a few years ago to sweeten the pensions of state employees could mean the district's annual payment will jump by up to $2.3 million next year.
Thanks to a return of a large sum of cash once held by the district's health insurer to offset costs, Vensel predicted the district will end the 2003-04 year with revenues exceeding expenditures by about $1.25 million. He recommends putting $750,000 into a fund specifically to offset health insurance costs.
"You're only as good as your crystal ball and most crystal balls are pretty foggy," Vensel said "A lot of this is based on gut feelings and that's the problem with assumptions."