The State College Area School Board on Monday finalized a $187 million 2023-24 budget that includes a 4.1% real estate tax increase.
Board members voted unanimously to adopt the final budget. The tax increase, which is the maximum allowed under the Pennsylvania Act 1 index limit, brings the district’s millage rate to 49.6082.
For the average residential property owner, the annual school tax would be $3,430, a $141 increase from 2022-2023. Residential parcels constitute 83% of taxable properties in the district. Commercial and industrial properties would see an average tax of $26,943, a $1,105 increase, and the average agricultural property tax would be $4,770, a $196 increase.
After keeping tax rates flat in 2020-21 and 2021-22 because of COVID-19 impacts on residents and businesses, SCASD raised taxes for 2022-23 by 3.1%, which was the maximum allowed last year without seeking an exception under the Act 1 Index.
The proposed budget includes $187,132,736 in expenses, a 3.8% increase from 2022-23 and $188,350,588 in revenue, a 6.4% increase.
As is typical, salary and benefits make up the vast majority of expenses at 71% of the budget, followed by debt service and capital-related transfers (11%), supplies and equipment (6%), purchased property and other purchased services (5%), charter schools (4%), professional services (2%) and other transfers and fees (1%).
New recurring expenses that were previously grant-funded include two mental health clinicians, the Multicultural Student Success Initiative and partial funding for the family liaison/bilingual educator position. Those total $398,790.
Other recurring costs include a human resources system, girls wrestling program, investment in cyber security and inflation on products and services. Non-recurring funding is allocated for a new reading program and maintenance service for the physical plant office.
The district will pay $224,000 less in required contributions to the Public School Employees’ Retirement System, “the net impact of an increase in salary expenses and a decrease in the percentage contribution rate from 35.26 percent to 34 percent of qualifying salaries,” according to a news release.
On the revenue side, the district anticipates increases of $6.4 million from real estate taxes, a $1.69 million assumed assessed value growth and $4.7 million from the tax increase. Budgeted state revenue increases by $1.73 million, mostly from an approximately $1.56 million increase in the basic education subsidy. State revenue related to mental health funding increases by $105,000 and special education funding by $75,000.
The vast majority of the budget revenue — 80% —comes from local tax revenue. Another 19% comes from state sources and 1% from federal sources.
SCASD’s ending unassigned general fund balance will be $14,828,141, which at 7% of the budget remains under the 8% maximum allowed.
The 2023-24 budget goes into effect July 1.
