Another tax increase planned for State College’s district. What’s in the budget?
AI-generated summary reviewed by our newsroom.
- The State College Area School District plans to raise taxes next year.
- The proposed 2026-27 budget includes a 3.5% real estate tax increase.
- If approved, it would mark the fifth straight budget that includes a tax hike.
The State College Area School District is planning another tax increase as it works to finalize its next budget.
While presenting to State College’s school board on Monday, district officials said the proposed 2026-27 final budget will include a 3.5% tax increase. The increase, which matches the maximum allowable hike under Pennsylvania’s Act 1 index, would produce an additional $4.6 million in revenue for the district.
If approved, the budget would mark the fifth straight year State College’s district has raised taxes after keeping them level during the 2020-21 and 2021-22 budget years. The planned tax increase falls below the 4% hike implemented for the 2025-26 budget.
State College’s proposed final budget projects $214.5 million in revenue and $221.6 million in expenses — increases of 3.4% and 4.4%, respectively, from the final 2025-26 budget. If the budget holds, it would leave the district with an unassigned fund balance of roughly $13.2 million.
Personnel costs remain the primary driver of district expenses, according to the presentation from Randy Brown, the district’s finance and operations officer, and Joe Viglione, the district’s assistant business administrator. The district’s contracted wages will reach $99 million as part of the 2026-27 budget after increasing by about 5.5% annually since 2023.
Health insurance costs, which have grown by roughly 10% per year since 2023, will reach $22.3 million, according to the proposed 2026-27 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,” Brown, Viglione and Superintendent Curtis Johnson wrote in district memo. “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.”
The 2026-27 budget will include funding for two new custodial positions, a co-ed hockey coach and a co-ed club rugby coach. The district is also expected to hire a 0.17 full-time equivalent middle school science teacher to cover an accelerated course.
Those new positions do not yet include new special education staffing, Johnson said. The district could hire up to four new special education staff members to comply with ratio mandate for special education programming.
A lack of significant increases to special education funding from the state remains a key budget pressure for the district, Brown and Viglione said. State funding for special education has grown just 9% since 2023, while the number of State College students enrolled in some form of special education programming has grown by 26%. More than 1,000 students across the district receive special education instruction today.
Overall, local revenue sources comprise nearly 80% of the proposed budget and account for about $170.3 million — $134.5 million of which derives from real estate taxes. Total state funding, which will not become finalized until at least late June, is assumed to increase by $300,000 to $42.7 million. District officials expect federal support to fall by $217,000, settling at $1.48 million.
One-time, unreliable funding sources, including decade-high tax revenue and additional subsidies from the state, helped buoy the district budget across the 2025 fiscal year, Brown and Viglione said. Upcoming challenges are expected to complicate efforts to help revenue beat budget estimates.
The growth rate for assessed values used to calculate real estate taxes will drop by 0.2% next year due to assessment appeals by “various commercial businesses,” Brown told the board. That decrease would bring 2026-27 revenue down by $1.1 million.
State funding has not kept pace with inflation in recent years, and federal funding has returned to typical levels following a multi-year spike following the COVID-19 pandemic, according to Brown and Viglione, who noted both directly impact the district’s budget. State College’s district kept real estate taxes level for its 2020-21 and 2021-22 budgets, which produces impacts that compound in future years.
“We’re not talking to you about a budget problem. We’re talking to you about a budget challenge,” Viglione said. “We’re still in a solid place, but there are challenges ahead of us and decisions that are going to need to be made over the course of the next year or years to make sure we stay in line and meet what our responsibilities are — not only from a district lens, but also from a state and federal lens.”
State College’s school board is expected to vote on a measure to potentially approve the proposed budget at its next meeting on April 20. The district would then host a public hearing on May 18 before the final budget is up for a vote on June 1.
%202.JPG)