It's time to break the piggy bank.

School districts around York County have been building up fund balance reserves for years. The time to spend down that balance more aggressively is now, several business managers said.

Northern York School District estimated it has $5.5 million of its fund balance available to help balance its 2011-12 budget.

Business manager Jason Young said the district wants to avoid entirely using its surplus "You can run into a cash flow crunch pretty quickly" -- but there are plans to use a substantial portion.

"I want to be careful how much we eat into it in one year. With the fund balance, once it's gone, it's gone," Young said. But "this is the time to be using it, and this is the reason it has grown, for times like this. We could use that fund balance to help the taxpayers out."

Using a small portion of the surplus each year can help spread out budget cuts, he said.

Balance the budget: Business managers said the state's property tax cap for next year, which mostly hover in the 1 to 2 percent range, and looming pension increases and other rising costs mean a tax increase and a few budget cuts won't likely be enough to balance their budgets.

Red Lion had a $9 million surplus at the end of 2009-10, and a similar size is expected at the end of this school year. Business manager Terry Robinson said he's budgeted using $1.9 million of surplus for the 2011-12 budget.

Robinson said some money Red Lion has set aside for debt service will now be used in coming years, and it will help lessen any potential tax increases.

In another example, Dallastown is facing a $4.4 million deficit for the 2011-12 school year and plans on using $1.7 million of its $7.2 million estimated, undesignated surplus. The district used about $2.8 million this year.

In Dover, business manager Belinda Wallen told her board the district could tap into its $2.57 million fund balance to solve its deficit problem. But she warned such a strategy just puts off the deficit for another year.

Running dry: Other districts already are running out of fund balance to use.

York City had a negative fund balance of about $300,000 five years ago, but it grew all the way to $11.5 million by 2009-10. And the district avoided a tax increase for most of those years, as well, including this school year, in part by using that surplus.

But for 2011-12, the district says it has a $14 million deficit and is preparing to slash $10.6 million in programs, saying it doesn't have enough of a surplus.

Taxes will likely need be raised over the state limit, board members said.

City school officials said they'd like to use $2 million of fund balance money to help balance the 2011-12 budget, which would basically wipe out their surplus.

Northeastern has experienced a steady drop in its fund balance, a situation that helped cause the district to consider asking teachers to take a wage freeze next school year to help balance the budget. They later decided against having the teachers vote on it.

Northeastern has used about $4 million of surplus in the past few years, going against the preference to only use it as a "stop-gap measure," said business manager Brian Geller.

"It's been deeper and longer than what we had hoped," he said of surplus use.

Now he is planning to use about $500,000 of the remaining $1.8 million for the 2011-12 budget.

"It's the taxpayers' money. We should use that as best we can," Geller said.

-- Reach Andrew Shaw at 505-5431, or