The State College Area School Board on Monday adopted a final 2026-27 budget that includes a real estate tax increase.
Representing a 1.85 mills increase, the 3.5% tax hike — which is the maximum allowable this year under the state’s Act 1 index — will bring the district’s millage rate to 52.9597, effective July 1. It is projected to provide an additional $4.6 million in revenue.
The average residential property owner will see an increase of about $134 per year.
As part of the budget adoption, the board also approved an assessed value reduction of $3,579 for homestead and farmstead properties, resulting in a total real estate tax reduction of $196 for eligible property owners. The supplemental property tax program, meanwhile, will provide rebates ranging from $380 to $1,000 based on income and issued on a first-come, first-served basis to eligible property owners until the $115,000 set aside in the budget for the program is exhausted.
The tax increase is part of a 2026-27 budget that includes $221,804,373 in expenses, a 4.86% increase over the last year, and $214,535,784 in revenue, a 3.5% increase. It is uses $3,001,000 in committed funds for debt service and $4,267,589 from unassigned fund balance.
On the expense side, personnel costs remain a primary driver of increases. Contracted wages have grown by about 5.5% per year since 2023 and are projected to be $99.3 million in 2026-27. Health insurance costs, meanwhile, have increased by about 10% per year during that time and are expected to total $22.3 million in the new budget.
“The growth in personnel costs, whether through the addition of staff or contract increases, impacts the district’s ability to remain competitive in the employment market,” Finance and Operations Officer Randy Brown and Assistant Business Administrator Joe Viglione and Superintendent Curtis Johnson wrote in a memo to the board in April. “The district’s investment in staffing enhances its ability to retain existing employees as well as attract new employees. The inflation that occurred at the exit of the pandemic has significantly impacted the wage levels for the district.”
New positions included in the budget are a 0.17 full-time equivalent middle school science teacher to cover an additional science class; two new custodians to maintain the additional 40,000 square feet added at Mount Nittany Elementary School as part of a renovation and expansion project to be completed in August; two elementary counselor positions; co-ed hockey and co-ed rugby club coaches; and an increase in hours for an administrator to assist the special education department.
The budget also includes an increase of about $1 million for deferred maintenance.
For income, local revenue makes up 79% of the budget at $170.3 million, with $134.5 million from real estate tax, $24 million from income tax and $11.8 million from other local revenue.
With the commonwealth’s budget not expected until the end of June at the earliest, total state funding — which represents 19% of the district budget — is assumed to increase by $892,000 to $42.8 million, with the basic education subsidy of $13.88 million remaining unchanged. The increase is largely due to an adjustment in state employee retirement and Social Security reimbursements.
Federal support is anticipated to decline by about by $217,000 to $1.475 million.
