The Altoona Area School Board reviewed its projected local, state and federal revenues for the preliminary 2025-26 budget during its committee of the whole meeting Monday.

According to Sue Franks, the district’s business manager, the annual budget is made up of approximately 67% state funding, 4% of federal funding and 29% by local revenues.

State revenue for this year’s budget is projected to be $82,982,567, an increase of $2,861,670 from the 2024-25 budget.

According to Franks, Gov. Josh Shapiro recommended $1 billion in property tax relief through the Homestead/Farmstead property tax exclusion. If confirmed May 1, the district would save about $205,900, providing a direct relief to taxpayers, she said.

Superintendent Brad Hatch said the district has to pass its budget by the end of June, and even though state officials strive to have their budget approved by then, district officials often aren’t certain what their state allocations will be until July, August or even later.

The district receives projections from the state and budgets its allocations conservatively, Hatch said, adding the projections also help the district structure its local and federal efforts.

Local revenues, based on the current tax millage rate of 7.0877 mills, are projected to total $35,527,069 for this year’s budget, up $1,126,815 from last year.

Franks said many new businesses have moved into the district’s area this year, including Bealls, Rural King, Discount Grocery, Center City Market and others. Macy’s closing causes a loss of business privilege and mercantile revenue, she said.

“Hopefully it will all balance out and we’ll end up a little bit ahead,” Franks said.

During the meeting, Franks presented a slideshow that outlined the district’s Act 1 index, which limits the maximum amount the district can raise real estate taxes to at 5.8% this year.

At the current rate, tax on an assessed property of $108,000 is $537.59 with the Homestead/Farmstead exclusion.

According to Franks’ presentation, a 2% increase would raise the district’s tax millage rate to 7.2295 mills, an increase of $15.31 on an assessed property of $108,000; a 3% increase would raise the rate to 7.3003 mills, an increase of $22.96; a 4% increase would raise the rate to 7.3712, an increase of $30.62; a 5% increase would raise the rate to 7.4066, an increase of $38.27; a 5.50% increase would raise the rate to 7.4775, an increase of $42.10; and a 5.8% increase would raise the rate to 7.4988, an increase of $44.40.

Last year, when the state’s Act 1 index was 7.6%, the board raised its rate by 5%, which generated a little more than $1 million in revenue for the district, Hatch said.

At the federal level, there’s a lot of uncertainty, Franks said. The district’s preliminary budget totals $5,017,756 in projected federal revenue, down $434,985 from last year’s budget.

Hatch said the district’s federal funding encompasses a lot of grant-funded programs, like Title I, Title II and Title IV.

The only concern the district would have if the federal Department of Education were to dissolve is how funding for these programs would work and if there would be potential cuts involved, Hatch said.

“That (funding) runs through the Department of Ed, and if it doesn’t, where is it going to run through and are there going to be potentially cuts,” Hatch said. “That’s kind of the uncertainty piece of it depending on how this whole thing plays out.”

Franks said the district is seeking to refund four of its bonds to get a lower rate, which could create a $750,000 potential cost savings over the life of the bonds.

She said a motion to move forward with bond refunding will likely be on the board’s regular session agenda in May.

“This would be a really good thing for the district,” Franks said.

At the next committee of the whole meeting, the board will review its projected local, state and federal expenditures for the preliminary 2025-26 budget. The meeting is scheduled for 5 p.m. April 28 in the science commons in the high school’s B-building.

The board is scheduled to approve the proposed 2025-26 general fund budget at the May 12 meeting and adopt the final budget at the June 16 meeting.