Keystone Central previews 2025–26 budget options, highlights cyber-charter tuition hit and possible millage increases

Keystone Central School District business manager Joni (last name not specified), speaking at the board’s Feb. 6 work session, presented a preliminary 2025–26 budget and scenarios that would close part of a projected deficit through millage increases or by committing reserves.

The district started fiscal 2024–25 with a fund balance shown as about $20.98 million on July 1, Joni said, and officials are proposing a resolution on the board agenda to commit a $1.3 million surplus to Fund 32 for capital projects. She also described a separate proposed $500,000 commitment toward an enterprise resource planning accounting system (ERP) the district hopes to implement July 1.

Why it matters: The presentation showed how rising benefits costs, higher bond principal and interest, and increased cyber-charter tuition are driving budget pressure. The board must decide whether to draw on reserves, raise millage, or both; those choices affect taxpayers and the district’s ability to fund capital projects and operations.

Budget math and options Joni laid out the district’s current projection and several illustrative millage scenarios. With no tax increase the district’s five-year picture shows a rising deficit driven by a projected 15% increase in employee benefit costs and a higher pension rate (noted in the presentation as PSERS at about 34% for 2025–26). She said the district’s current projected structural deficit is 5.6%.

- A 1.78-millage increase would raise roughly $490,000 and reduce the structural deficit modestly. - A 3.55-millage increase would raise roughly $980,000, lowering the deficit further. - A 5.34-millage increase would yield about $1.4 million in additional taxes, with a larger effect on the gap.

Joni told the board these are hypothetical scenarios for planning; she emphasized staff is still trimming line items and discussing attrition and repurposing positions with department heads.

Drivers: benefits, bonds, cyber-charter tuition Joni said benefit costs are trending up and she included a 15% increase in the draft. She also explained that debt service rose after approval of recent Liberty Curtain bonds: principal and interest climb from roughly $1.8 million in 2022–23 to about $2.7 million in 2025–26 and then level off later.

The presentation flagged a major district expense increase tied to cyber-charter tuition: between 2021–22 and 2023–24 cyber tuition payments rose by about $1.5 million, the speaker said, driven by both higher tuition rates and higher enrollment at cyber providers (Commonwealth Charter was used as an example where regular enrollment rose from 62 to 107 year over year). Joni said a governor’s proposal to cap charter tuition at $8,000 would substantially reduce those costs statewide and for Keystone Central; she estimated a statewide cap could have saved the district roughly $1.1 million last year for just one cyber provider and suggested the savings could be $1.5–$2.0 million overall if enacted.

Board follow-up and next steps Board members asked for monthly legislative updates and requested additional detail on the adequacy/“local effort rate” calculation used by the Pennsylvania Department of Education (PDE). Joni and other administrators said they will bring deeper explanations to upcoming finance and facilities committee meetings and provide data comparing local effort metrics.

At the meeting the finance committee had also recommended continuing to examine commitments from the district’s fund balance for capital priorities and the proposed ERP investment; no final board vote on those commitments occurred at the work session.

Quotes and attributions Joni (business manager) summarized the budget process: “The budget was passed in February for the 2425 school year… when the bills for payment are listed on the agenda, we're telling you how we're spending the budget money.” She also urged board and community outreach on charter subsidy policy, noting a proposed state cap could be “huge” for districts’ budgets.

What remains unresolved Formal votes on proposed uses of the $1.3 million surplus and on committing $500,000 to ERP were not recorded in the work session transcript; both items appear on the board agenda for future action. The district will present more detailed revenue and expenditure figures at upcoming board meetings and the finance committee’s March preview of the general fund.

Ending Administrators told the board they will continue to refine revenue assumptions, present school- and program-level budget impacts, and return with the general fund development material at the next scheduled presentations in March.