Hempfield Area reduces expenses, balances $114.3 million school budget

The Hempfield Area school board passed a balanced budget Monday night, almost exactly two months after it was tasked with closing a $5.1 million deficit.

The gap was presented at the beginning of the board’s budget discussions in April. The board in May cut the deficit to $172,000, approving a $114.5 million proposed final budget.

The board unanimously voted Monday to reduce expenses to account for the remaining deficit, said district business Manager Paul Schott.

The $114.3 million spending plan — featuring the maximum allowable tax increase — is up about $7 million, or nearly 4.5%, from the 2024-25 school year, Schott said.

The 4.35-mill hike raises the district’s tax rate to 95.11 mills and increases tax bills about $98 annually for residents with the median assessed home value of $22,660.

The budget deficit has not been caused by bonds issued for the district’s high school renovation project or any other capital improvements, Schott said. The board approved in May a schematic design for the renovation, which Holtzman previously estimated will cost the district $150 million.

School officials have cited cyber charter school tuition, rising retirement payments and increasing health insurance costs as the district’s primary budget constraints.

Pennsylvania’s 500 public school districts got a respite from growing payments to the state’s Public School Employees Retirement System. But starting in 2025-26, schools’ contribution rates will begin climbing again — rising from 34% next school year to a projected 38.5% in 2032-33.

There is also a growing number of students leaving the district to pursue an online education at one of the state’s 14 public cyber charter schools, said Superintendent Mark Holtzman.

The House education committee moved forward legislation earlier this month to put an $8,000 cap on the tuition that school districts have to pay for students in their area to attend a public cyber charter — a move pitched in Gov. Josh Shapiro’s 2025-26 proposed state budget.

Special-education tuition could still exceed that rate, according to the bill.

Annual cyber tuition rates range from $7,600 to nearly $29,000 per student statewide, according to the Department of Education. Rates are determined by a formula based on the school district’s budgeted expenses from the year prior.

Hempfield Area could save nearly $2.7 million if the legislation was enacted, Schott estimated. The bill has been in the Senate education committee since June 6.