PHOTO PROVIDED Keystone Central School District Business Manager Joni MacIntyre talks to the school board about the 2025-2026 budget and ways the administration is looking to cut spending.

MILL HALL — As the Keystone Central School District continues its work toward a 2025-2026 budget, Business Manager Joni MacIntyre told its board of directors a large issue regarding its expenses are related to unregulated cyber charter schools.

During its work session on Thursday night, MacIntyre provided an update on the budget planning process — showcasing a preliminary budget for the coming fiscal year.

MacIntyre said the district would see a small increase in its state subsidies for the coming year and noted this year would be the last time the district would see an increase — this one of $400,000 — on its Liberty Curtin bond obligation.

“After 2026-2027 you’ll see that level off,” she said.

The district is also looking at another increase in its health insurance.

“It looks like we are somewhere around 15 percent. Currently we’re at 11 percent for this year,” MacIntyre said. “That’s why you don’t see any indication of that coming down.”

Though the district is looking at an increase of expenses in various forms, the administration has also managed to trim $1.3 million from the proposed budget.

This includes $430,000 through staff attrition/resignations; $98,200 from curriculum; $6,500 combined from the elementary schools; $270,550 from special education and $522,000 from technology.

“We’re still working on this. The departments are pretty well worked through but we’re still working in other areas,” she said.

Due to these factors, and other reasons, MacIntyre said the district may need to look at a tax increase for the upcoming budget. Two scenarios she brought to the board include a 1.78 millage rate increase — which would see taxes raised about $25 on average — or a 3.55 millage increase — which would see taxes raised about $75 on average.

The district also saw an increase in cyber charter enrollment which had an effect on expenses.

Later in her presentation, MacIntyre presented the district with information from the Pennsylvania Association of Rural and Small Schools (PARSS) in regards to cyber charter spending.

“It’s really good information that the public should know, the taxpayer should know exactly how cyber charters are spending your tax dollars,” she said.

It was noted that cyber charters are different from the district’s own virtual academy.

“That’s totally separate. These are Keystone Central School District kids not attending Keystone Central Schools, either brick and mortar or virtual,” MacIntyre said.

In the presentation from PARSS it was noted Gov. Josh Shapiro’s budget proposal will include a $75 million funding increase to the 501 public school districts throughout Pennsylvania. However, MacIntyre said this would equate to $800,000 to KCSD and does not match inflation.

The presentation also noted there is a proposal to discontinue a cyber transition line item in the state’s budget and cap a tuition rate — which is paid for by the district a student reside’s in — to $8,000.

MacIntyre said, of the $100 million line item that was in last year’s budget, the district only received $268,000 to offset cyber charter costs.

If the new proposal were to go through, MacIntyre said school districts statewide could see an overall savings of $278 million.

MacIntyre’s presentation also included information from an audit conducted by Pennsylvania Auditor General Tim Defoor on cyber charter schools in Pennsylvania.

The audit was conducted through information gathered between July 1, 2020 and June 30, 2023, where DeFoor’s staff focused on three things: revenues, expenses and fund balances.

According to information presented by MacIntyre, in 2020 the fund balances for five cyber charter schools in the state was $254 million. In 2023, that number was raised to $618 million.

“They have no restrictions on what their fund balances can be. They’re not held to the same standards as school districts,” she said.

In that time frame, enrollment for these charter schools went from 27,000 to 44,000.

MacIntyre broke down how expenditures found in the audit could have an effect on the district. Specifically, she spoke about Commonwealth Charter Academy, PA Cyber Academy and Reach Cyber Charter, all of which students from within KCSD attend.

For Commonwealth Charter — which has the highest number of KCSD students — expenditures found in the audit included $22 million for employee bonuses; $2 million in fuel stipends and $1 million on vehicle fleet.

PA Charter’s expenses included $1.4 million in bonuses and saw its fund balance increase by $110 million overtime. “That’s a 103 percent increase from one year to the next,” MacIntyre said.

Reach Cyber’s expenses included $7 million in employee bonuses; $4.2 million in gift card purchases for families for rent, utilities and even horse lessons.

Some of the cyber charters even spent $404,000 on entertainment such as trips to Hershey Park and Sky Zone.

“(These are) inappropriate expenditures… not where school districts or any learning facility should be spending their dollars. These were not towards student education,” MacIntyre said.

MacIntyre read a specific quote from DeFoor’s office which said, “Auditor General Tim DeFoor has made it clear that cyber charters are being paid more than they need to educate students and are spending tax dollars in ways that would be unacceptable for a school district. They are not being held to the same standards as school districts.”

“Cybers allow students to avoid accountability for truancy. There are no boards, there’s no one helping guide them,” she said. “This really is an eye opener and should really let you know, this is how cyber charters are spending their money. I’m sure there are student expenses but a large portion of them are not.”

She noted the district spent $4.4 million last year for cyber charters.

“The taxpayers need to know. I don’t know if they would want their tax dollars to be spent to educate students this way,” she said.

MacIntyre’s final presentation also touched on what she described as “abysmal” academic performances.

The presentation showcased the academic standards between Pennsylvania Cyber Charter School Assessment compared to the Pennsylvania State Average.

Focusing just on staple subjects — English, math and sciences — the charter schools all performed below average.

During board discussion, Board Member Elisabeth Lynch touched on the lack of accountability cyber charters seem to have in comparison to public schools — particularly in cyber charters sharing student attendance.

“We’re paying for it but we’re not allowed to have any accountability,” she said.

Board Member Chris Scaff asked if the district could request specific data regarding students it pays to attend the cyber charters.

“There’s no way for us to get that information unless they’re willing to share it. Which I’d be surprised if they are,” Superintendent Dr. Francis Redmon said.

Board Member Jeff Johnston thanked MacIntyre for presenting the information to the board and for bringing the issue — which he described as “criminal” — to the public’s attention.

He also noted cyber charters have purchased 21 brick and mortar buildings, something he found strange given the nature of a cyber charter school. He further emphasized the increase of cyber charters revenue — which grew from $473 million to $898 million over the span of the audit report.

“It’s nearly a billion dollars of taxpayer money being used for gift cards, for advertising — everytime you see one of their advertisements and commercials on TV that’s where your tax dollars are going,” he said. “To me it’s criminal.”

Johnston contended if any public school district were to do “even a fraction of this… we would have the auditors here, we would be found criminally negligent. There’d be people losing their jobs.”

“The charter school law is a farce. There is nothing in it that holds any of these guys accountable,” he said. “There are people, the CEOs of these organizations, making big bucks.”

Board Member Dr. Bill Baldino asked if there was a way to know why the graduation rates at the cyber charters are so low.

“I don’t know that I can speak to that definitively,” Redmon said. “I have a lot of speculation but I would prefer not to share because it’s just speculation.”

Baldino echoed some of Johnston’s comments, noting it was strange the cyber schools would have so many brick and mortar locations.

Ultimately, MacIntyre and Redmon are encouraging residents to reach out to their legislators to find out how their tax dollars are spent for public education.

“How is it being spent locally or are your tax dollars being siphoned away,” Redmon said.

MacIntyre said that was one way local residents could help in cyber charter reform. She noted earlier in her presentations there are lobbyists in Harrisburg who are in support of keeping cyber charters the way they currently stand.

“You need to know how your cyber charter schools are spending your money. You need to talk to legislators. We need to put a cap on it or have some kind of requirements put on cyber charter schools for their spending,” she said.

MacIntyre noted it was discussed on a state level about putting the $8,000 cap on cyber charter tuition which is a good sign.

However, she said the rate is expected to be a bit higher still.

Johnston requested board members who planned to attend a legislative round table next week bring up this issue.

All three budget presentations MacIntyre presented on Thursday night may be viewed by visiting the school board’s BoardDocs at https://go.boarddocs.com/pa/keyc/Board.nsf/Public#.