Board discusses missing state aid, Act 1 opt‑out and rising cyber‑charter costs

Business‑office staff told the board the state budget impasse has held back roughly $11.6 million in subsidies the district expected to receive, with state subsidies accounting for about $11.4 million of the total. The shortfall includes delayed “ready‑to‑learn” and transportation subsidies and will reduce interest earnings the district relies on as part of operating revenue by an estimated $50,000–$60,000 in the near term.

Facing those unknowns, staff reviewed the Act 1 timeline and recommended the board adopt an accelerated opt‑out resolution to state it will not exceed the Act 1 adjusted index (4.4 percent). Administration proposed placing the opt‑out resolution on next week’s agenda or at the December reorganization meeting so the district meets statutory timelines; board members discussed the risk if state funding is lower than expected and whether the district should prepare for a referendum if it needed to exceed the index.

Staff also highlighted rising tuition costs for third‑party cyber charter schools and the district’s financial exposure. The district reported that payments to cyber charters have increased year‑to‑year and that the budgeted cyber‑charter tuition for 2025‑26 is in the roughly $3.1–3.2 million range. Board members questioned per‑pupil figures and whether the district receives comparable services; a board member cited a per‑student payment figure of about $13,524 the district has paid to cyber providers, and administration said that the required payment to cyber charters is similar to the per‑pupil subsidy that otherwise supports local brick‑and‑mortar education, creating a sizable local tax‑dollar outflow.

Next steps: staff will place an opt‑out resolution for board action (or at the reorganizational meeting), produce additional revenue information on development/assessment growth when requested, and continue budget planning as state funding remains uncertain.