State College Area School District’s proposed 2025-26 budget includes a 4% real estate tax increase, according to an overview presented to the school board on Monday night.
The increase — which is the maximum allowable this year under the state’s Act 1 index — would add 2 mills to the district current millage of 50.9228. Randy Brown, finance and operations officer, and Joe Viglione, assistant business administrator, said revenue increases have not been large enough to counteract expenditures.
The proposed budget projects $207,294,949 in revenue and $209,091,02 in expenditures, increases of 2.35% and 2.93% over 2024-25, respectively.
Personnel costs, which are expected to increase by $8.9 million and constitute 75% of the budget, are the primary drivers of the increase in expenses, according to the district. That includes addition of staff and contract increases, along with rising costs of benefits.
While health insurance costs are currently projected to climb by $2.3 million, the district “recently got what we think is some potentially good news which we are still verifying with the actuary, and we plan to have a more definitive projection in the next few weeks,” Viglione said.
Six new positions are proposed for 2025-26.
• A new special education teacher is proposed to meet the needs and requirements of the district’s growing special education population.
“There’s a significant increase in need for staffing for special education, so while we’re only adding one position to the budget, we are shifting other positions internally to meet that need.” Board President Amy Bader said. “There is more growth in the need for special education teachers than what we’re adding to the budget.
“And I want to point out that that’s a federally mandated requirement. We have ratios we have to meet, and with our increasing students who need those higher ratios, that drives up our need for personnel, which drives up our costs. That’s federally required through IDEA [the Individuals with Disabilities Education Act], which has never even been partially funded by the federal government, nor has special education increased significantly from the state in the last several years.”
According to the presentation, the addition and internal shuffling will help “better manage increasing service demands, maintain reasonable caseloads and ensure all students receive the
necessary support to succeed.”
• A proposed special education department clerical position will help respond to the department’s reporting and billing needs, including reports prepared to collect reimbursement for services and facilitating transportation for students with individualized education plans and 504 plans, which is currently outsourced to a third party.
“The goal will be that the reimbursement and decreased costs from the third party should help offset the cost of this position,” according to the presentation.
• A new business education teacher will be needed to meet the Pennsylvania Department of Education mandate that, starting with the 2025-26 freshman class, completion of a new personal finance course is required for high school graduation. Bader noted that State High enrolls about 2,400 students and multiple sections of the course will be required.
• A new school psychologist position is proposed to meet increasing parent requests for special education and gifted services evaluations. Bader and Brown explained that the district is required to provide the evaluations upon request in a timely manner not only for district students but also for private and charter school students in its boundaries.
The district has contracted out some of those evaluations and is now opting to add the position in-house, which Bader said will result in some cost savings.
• A student activities and athletic manager is proposed because of increasing student participation in extracurriculars. The position will assist with district-wide activities and athletics programs, overseeing student clubs as well as PIAA and intramural athletics programming, including scheduling, facility management, equipment purchasing and hiring.
• An additional physical plant custodian would allow Radio Park and Park Forest elementary schools, which currently share one position, to each have a full-time custodian.
Increases in substitute pay rates are also planned. Day-to-day substitute teacher pay would increase from $120 to $135 per day for emergency permit substitute teachers and $140 for certified educator substitutes. Daily rates for retiree substitute teachers and building substitute teacher would also increase by $15 to $150 per day.
Among other expenditure growth, the district also expects “significant” increases in utility rates for water, sewer, electric and natural gas.
On the revenue side, real estate revenue was higher than expected with four major properties in the district coming online, but has been slower in comparison to previous years, Viglione said.
Local revenue of $164.5 million represents about 79% of the district’s projected income for 2025-26, and of that 76% comes from real estate taxes.
Interest on investments has been in decline and the district projects a “drop off” in 2025-26 based on recent trends, Viglione said, falling from $4.5 million to an anticipated $2.25 million.
State revenue — about 20 % of the budget — is projected to increase by about $100,000 to $41.3 million, while federal revenue, which is less than 1%, is expected to decrease by $140,000 to $1.475 million.
Brown said district staff will continue to refine the budget in the coming weeks based on further analysis and board input. While he anticipates additional expense reductions, he expects the tax increase will remain 4%, noting that beyond the 2025-26 budget the district has the new Park Forest Middle School project in the offing, development of the District-wide Facilities Master Plan and faces uncertainty with interest rates.
“It’s not just for next year’s budget which is also operating in a deficit. It’s also building the capacity in tax revenue and revenue in general for the district for what’s upcoming,” Brown said.
Bader added that with a potential pending teacher shortage, the district continues to plan to be competitive for a shrinking pool of candidates.
The school board is scheduled to vote on the proposed budget on April 21, with a public hearing on May 5 and adoption of a final budget on June 2.
