Middletown Area SD posts proposed 2025-26 general fund budget; plan uses fund balance and proposes 5.1% tax increase

Eric Fisher, the district finance presenter, told the Middletown Area School District board that the proposed final general fund budget for the 2025-26 fiscal year would total $64,879,593 in expenditures against $62,553,488 in revenue, leaving a planned use of fund balance of $2,326,106.

Fisher said the larger-than-usual increase in next year’s spending is driven primarily by added debt-service payments tied to the district’s MAPS construction project and by rising employee benefit costs. “Total salaries in the 25-26 budget are $24,100,000, an increase of $868,000 over the current year,” Fisher said, and he noted benefits are budgeted at about $16.2 million, a projected increase of roughly $1 million.

The presentation broke spending into five broad categories. Fisher said salaries and benefits account for more than half the budget; professional services, tuition and transportation, supplies and equipment, and fees and transfers are the other categories. Of the fees and transfers category, debt service is the largest single line item at about $7.8 million, an increase of roughly $1.4 million from the current year. Fisher said about $1.3 million of that increase will be funded from existing, committed fund balance.

Fisher also detailed rising charter-school tuition costs, noting that historical charter tuition expense for the district has climbed from about $223,000 two decades ago to an estimated $3.5 million for 2025-26. He explained that proposals in Harrisburg — including a proposed flat base tuition rate from the governor — could change future costs but that negotiations and legislation remain unsettled. “There has been a lot of pushback from the charter schools,” Fisher said, and the district is budgeting conservatively until the state budget outcome is firm.

On revenue, Fisher presented projected federal, state and local receipts. State revenue was projected at about $22.5 million, and local revenue at roughly $39 million. He said assessed-value growth alone (an estimated $10.6 million increase in assessed value) would generate only about $264,000 in new revenue; to balance the proposed budget the financing plan requires a 5.1% tax increase, which Fisher said translates to $126 per $100,000 of assessed value, with $21 of that attributed to debt-service costs and $105 to operations.

After the presentation and questions, the board voted to adopt the proposed final general fund budget for public inspection. The motion to adopt the budget for public inspection stated the expenditure and revenue totals and the planned fund balance use listed above; the motion carried on a voice vote.

Why it matters: The proposed spending plan would raise local taxes under Act 1 guidelines and uses one-time fund balance to phase in increased debt payments tied to capital work. The board’s vote to place the proposed budget on public inspection begins the statutory notification period before final adoption and gives taxpayers a formal opportunity to review the numbers.

Next steps: Fisher said the district will continue to refine line items before final adoption in June and monitor state budget actions that could affect charter tuition subsidies or other revenue lines. The board scheduled further review before the final budget vote.