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Sullivan County SD officials attribute $1.9M projected deficit to rising cyber‑charter and special‑education costs
Summary
District leaders told a packed town hall that rising cyber‑charter tuition, special‑education spending and higher health‑care costs have driven a projected deficit; the board has implemented freezes, retirement incentives and reserved a furlough option while urging state funding reform.
Board President Marylice Nolan and Superintendent Samantha Kaylor told residents at a town‑hall meeting that Sullivan County School District faces a projected budget shortfall because expenditures now exceed projected revenues for the coming school year.
"Putting it extremely simply, our expenditures exceed our projected revenues for next school year," Superintendent Samantha Kaylor said, outlining higher projected cyber‑charter payments (about $2.2 million), special‑education costs (about $2.8 million) and increased health‑care and contractual obligations.
The district presented a projected revenue total of $19,800,000 for the 2026–27 school year, with federal revenue at 1.1 percent, state revenue at 35 percent and local revenue at 63.9 percent. Officials said the district's fund balance was $1,900,000 as of June 30, 2025, and the administration plans to use $264,000 of that balance in the proposed budget.
Nolan and Kaylor emphasized the role of cyber‑charter tuition in the shortfall. When a resident enrolls in a cyber charter, the resident's local district must pay a per‑pupil tuition rate set by a state formula tied to district spending. "We pay $20,000 for the year for every regular education student, about $38,000 for every special‑education student," Nolan said. Those amounts, officials said, are higher than many other districts and were shown on slides as Sullivan County's projected rates for the coming year.
Officials stressed that the problem is structural rather than criminal. An independent audit by Baker Tilly found no evidence of wrongdoing, Kaylor said, and the district has complied with Pennsylvania Department of Education audit requirements. Nolan cited a February 2025 Pennsylvania Auditor General report that found several large cyber providers accumulated substantial fund balances while local districts' reserves declined; the report noted state law imposes no limit on cyber fund balances while districts face limits.
To address the gap, the administration has imposed a budget freeze, instituted a hiring freeze, postponed nonessential capital work, negotiated or will negotiate lower professional‑service rates, and offered an early‑retirement MOU to reduce payroll by attrition. The board last month passed a resolution preserving the option to furlough up to eight professional staff if necessary; the administration said that step is a contingency and not an immediate plan to execute layoffs.
Kaylor said the district will bring specific cost‑saving proposals to a Committee of the Whole meeting on May 19 and vote on a proposed final budget on May 26, with final adoption after public inspection on June 23.
The board urged community advocacy at the state level. "We would encourage you to contact our representative Joe Hamm and Senator Jean Yaw," Nolan said, asking residents to press for funding reform that aligns cyber tuition to the actual cost of online education while preserving families' ability to choose cyber options.
Next steps: the district will publish a fact sheet and a summary of public feedback on its website, and the administration said it will follow up with families individually about unresolved student‑specific matters.
Ending: The committee discussion is scheduled May 19 and a board vote on proposed cost‑saving measures May 26. District officials said they will exhaust internal savings before pursuing programmatic cuts or furloughs.
