The Red Lion Area school board will start its 2013-14 budget preparation with a $5.3 million deficit.

The budget is only in its infancy, but based on initial projections, Red Lion will have about $85.5 million in expenses and $80.2 million in revenue, said business manager Terry Robinson.

The board, which got an update at its Nov. 15 meeting, will get much more detail at its Jan. 10 meeting.

Red Lion might lay out some options at that point, Robinson said. The district, like the rest in the state, has until the end of January to decide whether to exceed its property tax cap.

For the 2013-14 school year, Red Lion's cap is 2.3 percent. The district can go above that if it is approved for exceptions or goes to voter referendum.

If the board decides to pursue exceeding the cap, it won't lock the district into raising taxes that much, but it does give the option. Robinson said the board hasn't had talks on that yet.

Worst-case scenario: His budget is based on the most conservative measures, as it makes it easier to be on the safe side than assume revenue is higher than it turns out, Robinson said.

That means the $5.3 million gap likely will dwindle as details emerge on such revenue areas as state funding, with Robinson assuming it will be flat.

Robinson also is assuming there will not be a tax increase; Red Lion raised taxes 1.5 percent this year.

Red Lion has about $5 million of surplus that it could use to help close the gap, as well.