BELLEFONTE — Bellefonte Area School District residents could see a 2.5 percent increase in their property tax bills under a proposed $65.2 million budget approved by the school board.

The proposed final budget for the 2025-26 fiscal year includes a real estate tax rate of 55.7094 mills, which would raise the average homeowner’s tax bill by about $73. District officials cited rising health insurance costs as the primary driver behind the millage increase.

During a presentation at the Tuesday, May 6, school board meeting, administrators outlined projected revenues and expenditures for the upcoming academic year. The financial presentation showed total revenues for the district amounting to $62,085,000, with total expenditures projected to be $65,175,000. The district will use $3,090,000 of its existing funds to close the deficit, resulting in an ending balance of $4,563,255.

In terms of expenditures, the district has budgeted $24,202,128 for salaries; $16,913,615 for benefits; $2,409,504 for professional services; $10,883,315 for purchased services; $2,843,223 for supplies; $746,250 for property; and $6,535,007 for other needs and uses.

Among the largest increases on the expenditure side is a $400,000 hike in health insurance costs, which Director of Fiscal Affairs Kenneth Bean said is largely due to high claims over the past year and a shift toward more employees selecting family coverage with lower deductibles.

“You can see, the last three years especially, (insurance costs) have been slowly increasing,” Bean said while reviewing the figures. Since 2023, health insurance costs for the district have risen by $1.3 million.

The average homeowner in the district has a property with a market value of $108,014 and an assessed value of $54,007. Under the proposed tax rate, this would result in an annual real estate tax bill of $3,008.70 — an increase of $73.45 from the current year.

Referring to the district’s history of modest increases, Bean said, “For the last 10 years, it’s been very manageable considering the costs, pandemic and other issues that have gone on in the economy.”

Though not included in the formal presentation, Bean noted that homeowners receiving property tax relief through the state’s homestead/farmstead exclusions would likely see their taxes increase by about only $30-40.

In the budget is a proposed $18 million bond issue to complete funding for the new 98,000-square-foot elementary school currently under construction, as well as renovations at Pleasant Gap Elementary.

Scheduled to be issued later this year, the bond would cover costs such as playground equipment, furniture and technology for the new building, along with essential maintenance at Pleasant Gap. District officials said the updates are part of an effort to improve educational equity across schools.

The bond amount was increased from the previously discussed $15 million to provide additional flexibility in spending.

“If we don’t end up doing that, the money budgeted there can be moved and used for whatever the board would see fit, or it could be moved into future capital projects down the road, so there’s flexibility there,” Bean said.

The proposal also includes $10,357,157 budgeted for special education. In the current academic year, BASD is responsible for 582 special education students, who are categorized into tiers based on the cost of their support services.

Of the nearly 600 special education students enrolled in the 2024-25 academic year, roughly 97 percent fall into the lowest-cost category, which is less than $27,000 per year.

“The overwhelming majority — 566 — of our 582 students are in the Tier One, or the low category,” said Bean, noting that, in previous years, more students were placed in higher-cost tiers of support.

“Mrs. Butterworth and Mrs. Smith have done a wonderful job of reeling in costs — not to the detriment of the students, but by being more practical in the way they’re handling these cases,” he said.

By addressing more special education needs internally rather than outsourcing services, the district has reduced expenses while maintaining education quality.

“That’s saving the district money and, in my opinion, probably providing the students a better education,” Bean said.

The board also discussed how potential changes in state charter school legislation could help reduce special education costs in the future, such as requiring charter schools to coordinate more closely with districts on evaluating students for IEPs and notifying districts when students move out of their boundaries.

Additionally, the proposed final budget includes additional monies to fund five new positions — an Elementary Math Interventionist, school police officer, MTSS Federal Program Supervisor, school social worker and an additional Bellefonte eLearning Academy teacher to teach math — as well as the new elementary English Languages Arts curriculum the district approved in March.

Also included in the financial plan is the transfer of $1 million from the General Fund to the district’s Capital Projects Fund, along with an additional $1 million to the Athletic Fund.

The proposed transfer would bring the Capital Projects Fund balance to $3,275,000 as of July 1. According to board policy, 0.5 percent of the annual budget should be allocated to this fund; the proposal would exceed that guideline, setting aside 1.5 percent.

“I think, hopefully, we will see enough of an increase in the state budget somewhere down the line that we did not budget for — once we get it, we can move that into there,” said Bean.

For the Athletic Fund, the total proposed budget is $1,180,000. Planned expenses include upgrades to the weight room and the continued purchase of athletic uniforms on the standard rotation schedule.

Several outstanding factors could still impact the final budget. The state budget has not yet been finalized, and updated homestead/farmstead allocations were received after the board’s May 6 presentation. Those figures will be incorporated into the board’s next meeting.

Other pending issues include the finalized real estate assessed values and the state’s charter school funding formula, which could affect future expenditures. Bean said he anticipates the potential for some “gravy” in the final budget — additional funds that the board could allocate at its discretion.

The board is scheduled to review a revised final budget, if necessary, on May 21. The proposed final budget will be considered for adoption at the regular meeting of the Board of School Directors on June 10, 2025, at 7 p.m., in the Bellefonte Middle School cafeteria, located at 100 N. School St., Bellefonte, Pa. Homestead/farmstead exclusions are scheduled for approval at the June 26 meeting.

The budget is available for public inspection at the office of Kenneth G. Bean, Jr., CMA, Director of Fiscal Affairs, Bellefonte Area School District, 318 N. Allegheny St., Bellefonte, during regular business hours.

To listen to the presentation, visit https://tinyurl.com/basd-may-6. The budget portion of the meeting runs from 1:13:02-1:31:55.