STATE COLLEGE — State College Area School Board on Monday, June 1 approved the adoption of the2026-2027 budget that reflects $221,804,373 in expenditures, $218,535,784 in revenue and a 3.5 percent real estate tax hike.
The tax increase is equal to the state’s Act 1 Index, with the new millage rate set at 54.8132.
According to budget documents, top expenditures included $99 million for district employee salaries, just short of $32 million for PSERS retirement contributions, $22 million for health insurance, and $7 million for cyber charter school expenses.
The budget also reflects a $3 million shortfall between revenue and expenses will be met with a general fund balance transfer.
Last year, the district’s budget was $211.5 million that included a real estate tax hike that brought millage to 52.95.
“Growth in personnel costs (salaries and benefits) are the main drivers of the growth in the budget,” district Spokesman Matt Carroll said in a statement. “The budget also includes an increase of about $1 million to capital projects expenses for deferred maintenance to district facilities.”
Carroll said inflation costs and various funding sources also affected budget numbers.
“Like other school districts in Pennsylvania, SCASD’s budget is also impacted by inflation and flat funding from the state and federal government,” Carroll said. “In addition, in recent years the district benefited from higher-than-expected real estate transfer tax and investment income revenues exceeding historical highs. But these are one-time boosts that are not projected to continue.”
Also at the meeting, the board heard a capital financing update. District administrators are planning for current and future capital needs, including for construction of the new Park Forest Middle School building and districtwide maintenance recommended in the 10-year capital plan.
Administrators said the district has been saving capital reserve funds anticipating these expenses, and that the money can be tapped into to help reduce costs.
Finance and Operations Officer Randy Brown said the district’s ability to use capital reserves to pay for the Mount Nittany Elementary Expansion project, for example, saved the district from paying additional interest costs.
In other business, the board:
Heard an update on the Mount Nittany Elementary Expansion project. Administrators said lighting, kitchen equipment, and ceilings have all been installed and brickwork is complete. Next steps include finishing paving, moving in furniture and a final cleaning. The project remains on schedule to be ready for the start of the 2026-2027 school year.
