The plan represents a decrease of $4.3 million, or 3.5 percent, from this year's budget, but school officials say academic programs will not be curtailed.
Savings have come from 17 administrative layoffs, a scaled-back facilities budget, and teachers who accepted early-retirement incentives. Officials did not say how many teachers were affected.
The sale of two former school buildings will bring in $3.7 million, $700,000 of which will go toward a fund for maintenance and renovation projects at Chester High School, where last winter a heating system broke down during a cold spell.
The district is expecting to receive a $59 million education subsidy and $688,000 Ready to Learn grant. Like other districts, it faces a substantial increase - 23.6 percent - in the employer's contribution rate to public employees' pensions, a total of $861,000, along with a $1 million increase in health premiums.
Despite the bad financial report, Watkins maintains that the district has achieved success in the last year, including a reduction in school violence.
New for the 2014-15 school year will be a prekindergarten summer reading readiness camp, and additional advanced placement classes at the high school. There will also be continued emphasis on improved reading skills in the elementary schools.