Keystone Central board reviews proposed 2025–26 budget, hears growing virtual enrollment and cyber-charter cost concerns

Keystone Central School District trustees on Thursday reviewed a proposed 2025–26 budget that projects a multi-million-dollar shortfall under several scenarios and heard staff describe a persistent transfer of students to outside online (cyber) schools that is increasing district tuition expenses.

Christy, presenting the budget, said the district could face a $4.5 million shortfall in 2025–26 with no millage increase and described scenarios that would lower the gap with millage increases. “With no increase, we would have a shortfall of $4,500,000 in 25–26,” she said. She walked the board through potential millage-rate scenarios, reserve levels and a five-year projection that includes proposed cuts and staffing assumptions.

Why it matters: The district’s operating pressures include increases in health insurance, cyber-charter tuition, alternative education placement and transportation. Christy said the governor’s current budget proposal (as of February 2025) would increase basic education subsidy and several categorical streams, but those are proposals that could change. Staff reported an estimated $1.5 million increase tied to charter/cyber tuition and other specific expense pressures, and noted a proposed 15% health insurance increase in projections.

Virtual academy and cyber-charter enrollment: Christy gave a separate briefing on the district’s virtual academy and external cyber-charter enrollment. She said Keystone Central bills to about 14 different online schools and that enrollment there has increased substantially over recent years. “Right now there are 14 different online schools that we get billed from,” Christy said. She provided figures for Commonwealth Charter Academy (CCA) showing growth from dozens to more than 180 students billed at various points; Christy said the district currently has roughly 132 regular-education and 54 special-education students at CCA alone, and that per-pupil tuition at some cyber programs approaches $15,000 for regular education and roughly $27,000 for special education.

School leaders and board members called attention to two structural issues: a difference in local credit requirements (Keystone Central requires 28 credits to graduate, some cyber providers require fewer), and variable attendance and accountability practices among online providers. Board members and administrators discussed surveying families of students enrolled in external cyber providers to learn why families choose those programs and what would encourage them to return. Christy said she has prepared a short survey she can deploy to collect parents’ reasons and to probe perceptions of district offerings.

Budget adjustments and capital planning: The presentation also outlined reductions staff had identified — roughly $1.327 million in discretionary cuts made since the prior month — and a longer-term capital plan. Staff proposed bringing a specific costed list of projects from the 10-year plan to the full board and suggested transferring some unassigned fund balance to capital reserves after the board reviews project cost estimates. Trustees asked staff to produce itemized cost estimates before any transfer is considered.

Grant writing and other revenue options: Board members discussed whether to hire a grant writer or contract with a grant-writing firm. Trustees said outside vendors that work on a portion-of-award basis may provide better incentives than retaining a full-time district employee. One trustee noted a neighboring intermediate unit had used a successful firm for a large building grant.

Next steps: trustees asked staff to return with split-out figures (charter vs. cyber tuition), concrete cost estimates for prioritized capital items and survey results from families of students attending external online providers. Administrators will also continue to refine discretionary reductions and report counsel guidance on any financial decisions involving fund transfers.

Ending: The board paused to hold an executive session on personnel and contractual matters and adjourned after further dialogue about the budget and capital priorities.