State College district eyeing another tax hike. What’s driving the increase?
The State College Area School District is again eyeing a tax increase as part of its next budget, according to plans presented to the school board Monday.
The district is developing its 2025-26 budget with the expectation of recommending a 4% real estate tax increase for approval later this spring. The increase — which matches the maximum allowable hike under Pennsylvania’s Act 1 index — would mark the fourth straight year State College has raised taxes after keeping them level during the 2020-21 and 2021-22 budget years.
District administrators cited personnel costs as the primary driver behind the proposed tax hike. State College administrators said the district expects those costs, which include staff pay and benefits, to increase by $8.9 million for the next budget year and comprise about 75% of the total budget.
Proposed positions for the 2025-26 school year include the following:
- A new special education teacher to help meet growing special education needs
- A special education department clerical position to help manage the department’s billing and reporting duties, some of which are currently outsourced to third parties
- A new business education teacher to instruct a personal finance course that is required for high school graduation starting with the 2025-26 class under a new mandate from the Pennsylvania Department of Education
- A new school psychologist position to help meet requests for student special education and gifted services evaluations
- A new student activities and athletics manager position that will oversee the operations of student clubs and activities and Pennsylvania Interscholastic Athletic Association and intramural athletics programming as participation increases throughout State College’s schools
- A new physical plant custodian that would allow Radio Park and Park Forest elementary schools to no longer share one full-time custodian
Amy Bader, the school board president, said expanding the district’s special education staffing is a critical step to ensure State College schools keep up with mandates and increasing student needs.
“There’s a significant increase in need for staffing for special education,” she said. “So, while we’re only adding one position to the budget, we are shifting other positions internally to meet that need. There is more growth in the need for special education teachers than what we’re adding to the budget.”
The district also plans to increase its pay rates for substitute teachers from $120 to $135 per day for emergency permit substitute teachers and $140 for certified educator substitutes. The proposal would also increase the daily rates for retiree substitute teachers and building substitute teachers by $15 to $150.
Administrators cited other factors behind budget growth, including health insurance costs, which are expected to climb by $2.3 million next year, and additional security at athletic events, which has grown in cost by about 50% over the last two years. The district also expects significant increases in utility rates for its electricity, water, natural gas and sewer needs.
In total, the 2025-26 budget projects roughly $207.3 million in revenue and about $209.1 in expenditures. Those figures, which are still under development, mark increases of 2.35% and 2.93% over the 2024-25 budget, respectively.
Joe Viglione, the district’s assistant business administrator, said real estate revenue is growing with the help of four major properties in the district coming online, though growth is slower compared to previous years. Local revenue, totaling about $164.5 million, comprises nearly 79% of the district’s total projected income for the 2025-26 budget year, and about 76% of that is expected to come from real estate taxes.
Administrators said state revenue, which makes up about 20% of the total budget, will increase by roughly $100,000 to $41.3 million. Federal revenue comprises less than 1% of the budget and is expected to shrink by about $140,000 and fall to $1.48 million, while uncertainty remains about U.S. Department of Education and other federal funding impacts.
Randy Brown, the district’s finance and operations officer, said State College officials will continue refining the budget proposal over the next few weeks. He said he expects the proposed tax increase to stick at 4%, citing future financial challenges and responsibilities that include constructing a new Park Forest Middle School and expanding Mount Nittany Elementary, developing district-wide facility plans and managing uncertain interest rates.
“It’s not just for next year’s budget, which is also operating in a deficit,” Brown said. “It’s also building the capacity in tax revenue and revenue in general for the district for what’s upcoming.”
Brown said he expects additional expense reductions for the 2025-26 budget as district staff continue refining the proposal.
State College’s school board is scheduled to vote on the district’s proposed budget at its April 21 meeting. A May 19 public hearing will follow before a final budget is up for adoption at the board’s June 2 meeting.
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