The Panther Valley School Board will be reviewing a 2025-26 proposed budget with $40.67 million in revenues.

The finance committee got its first look at proposed spending plan this month, reviewing highlights with the district Business Manager Jesse Walck.

The proposed budget does not show a tax increase, but the state is looking at adding money to the Homestead Exemption pot, which could change numbers for the district.

The more people who qualify for the exemption means the district has fewer properties that can be taxed, which in turn increases the tax rate for everyone else as they have to make up the difference, he said.

Last year, the board struggled with a decision to either raise taxes to offset increased exemptions, or avoid a tax increase and face a $338,000 budget shortfall.

The board initially went with no tax increase, and then reversed its decision, increasing taxes 0.6 mill for Carbon County residents and 2.26 mills for Schuylkill County residents.

Walck also plans to present a tax millage option to support a new elementary school to the board, he said. The millage option can be phased in over three, four or even five years, he told committee members.

Walck did not have a possible millage rate to support a new school, as he continues to wait for a study reflecting the current pricing and interest rate environment.

A new elementary school was expected to cost $67.5 million when KCBA Architects presented its building study to the district in January 2024. The board then was adamant on not increasing taxes to support a new elementary school.

Walck said he plans to present the option in May and the board can choose to move ahead with the phased millage plan or not.

“It’s a fallacy to say ‘We’re going to save enough money to build a building,’” he said. “That doesn’t get you a building. You need to be able to pay for the building every year until it’s paid off.

“You need to be able to create enough millage to be able to cover the debt service,” he said.

Governor’s funds

The proposed budget also doesn’t include any additional funds outlined in the budget proposed by Gov. Josh Shapiro, as the state budget has yet to be approved, Walck said. He did not include any proposed funding last year in the budget process.

“It’s a conservative budget,” he said. “We’re not trying to put ourselves in a bad position.”

The district projects spending less on oil due to prepayment, which should decrease its costs by $130,000 next year, and the addition of a psychologist should reduce outsourced evaluations by $65,000, he said.

There is also a potential decrease in cost for Carbon Career & Technical Institute, as work on its budget is ongoing, he said.

Special education costs, however, rose more than 10% with outplacements and cost of additional staff, Walck said. Staff wages are also up 6.7%, which is above the teacher’s contracted 3% wage increases due to added staff and other expenses, he said.

Transportation costs have also increased by $300,000, Walck said.

JROTC

Another increase comes in Junior Reserve Officers’ Training Corps expenses, as the federal government put a new pay scale in place for the instructors, he said. Walck expects the district to pay out $187,000 for its two instructors, he said.

Director Renee DeMelfi said the federal government pays half the salary, and Walck agreed, but not the cost of the benefits. DeMelfi said that means the district is paying 100%.

“The cost of that program should be looked at,” Walck told committee members.

The board has supported the program, because it helps PV’s students, DeMelfi said, noting she didn’t want to speak for the board majority.

“I think the money could be better spent on somebody to teach reading or math, or something else to help our kids get where they need to be,” Walck said. “That’s a lot of money for two people that aren’t teaching a core subject.

“We could have three or four teachers for the amount of money that costs us.”

Cyber increases

Panther Valley expects to see an increase in cyber charter school expenses next year, Walck said, and has projected spending about $1 million more next year.

The district anticipates spending $4.95 million in cyber charter school tuition in 2026 — $1.1 million more a year than it pays its own teachers, aides and staff in salaries, Walck pointed out in budget line items.

Robert Palazzo, who is acting as superintendent, said the district was paying tuition for 316 students enrolled in cyber charter school as of Jan. 30. Of those, 50 are elementary students, 63 intermediate and 229 junior-senior high, he said.

“So, we’re paying more for kids that don’t even come to our building than we do for kids that do come,” said Director Pat Leonzi.

The cyber charter line item also includes some BHA students, Walck said. But the number of Behavioral Health Associates students now is 32, which is lower than people think, Palazzo said.

Director Michael Alabovitz said he’d like to see how much it costs the district for each cyber charter student, because that’s a number the taxpayers really need to see.

“All you did is take a public entity, privatized it … and they say they’re not for profit, but let’s be honest, they’re sitting on funds that are a disturbing amount of money,” Alabovitz said.

The cyber charter schools spend money on vehicles, advertising and frequent equipment replacement just to get rid of it and maintain the not-for-profit status, he said.

DeMelfi agreed, saying the cyber charter schools don’t have the brick and mortar presence, and they’re still charging all this money in tuition, looking more like for-profit entities.

And school districts, like Panther Valley, still have to provide for these cyber charter students to be in band or other activities, Alabovitz said.

Walck said that he would look at getting a breakdown on the costs per student.

Surplus spending

Despite uncertainty and increased costs, the proposed budget presented to the committee had an $845,636 surplus, he said.

However, additional items still need to come out of those funds, Walck said.

The district needs to look at bumping up its stop-loss insurance due to increased health insurance claims, Walck said, and he foresees a sizable increase in workers’ compensation insurance.

The district also needs to consider an increase in outplacements, or students needing outside the district in specialized education programs, in the incoming kindergarten class, he said

A contract with BHA for social worker at the high school, a position that has been working out well, also needs to be worked through, he said.

Walck expects the budget to be neutral once these and other additional items are factored in. The board also would like to make sure that there is money to transfer into capital projects to deal with ongoing facility needs, he said.