Tamaqua Area School Board got its first look at the proposed 2026-27 budget, which includes a 0.4754-mill tax increase.

Business Manager Connie Ligenza said that she included a tax increase for the board’s consideration in the $45.4 million budget, which projects $2.67 million higher expenses than last year.

Salaries and benefits make up most of the district’s spending at $16.1 million and $14.97 million, respectively, and both have increased roughly 5.6% each over the previous year, she said.

Transportation costs are expected to rise by $416,251, or 19.8%, Ligenza said. Those costs, however, reflect an increase over two years in a renegotiated contract with the transportation provider that were not in the current year’s budget, she said.

Charter schools tuition continues to drive out millions in district funding with projected spending up 23%, or an additional $554,320.

“At the end of ’24-25, we were at $3,222,762 that are just directly going out the door to payments to cyber and brick-and-mortar charter schools in the district,” Ligenza told the board.

The district expects to spend $2.95 million for the 221 students currently enrolled in charter schools, she said. Changes to the state formula calculating the district’s costs for charter school tuition allowing more deductions helped, Ligenza said.

“Had that change not gone into effect, that $3 million number would have been higher by just under $472,000,” she said. “Had that not happened, that number would have been closer to a million dollar increase in one year.”

Superintendent Ray Kinder said that charter/cyber school parents are required to provide proof of residency twice a year now, which would ensure that the district is not paying for tuition for students who moved from the area.

However, the burden is on the parents, not the cyber schools, to document residency, he said.

Letters have gone out for the first reporting due in March, but the district has only received one response out of 221, Kinder said.

There has been some confusion, with some cyber schools telling parents that they would handle reporting, he said.

“We are now going to be in the process of informing cyber schools and informing parents that we will no longer pay their money because they have not provided residency,” Kinder said.

He expects future residency reporting, which is due each year in March and November, will go smoother, and the district may do home visits for verification.

“Come summertime, everybody having done this once, it will be clearer how we handle residency and payments going forward,” Kinder said.

The proposed budget also retains a healthy fund balance of $3.9 million, which falls slightly above the 8% maximum recommended level of $3.63 million.

Ligenza proposed applying the reserve balance funds above the maximum of $315,745 toward a match required for the $3 million in energy upgrades and saving its undertaking.

The board on Tuesday approved hiring the McClure Company of Harrisburg to complete an investment grade energy audit based on quotes received last month. The district could save $2 million in energy costs over the next 20 years with the needed upgrades.

The board also approved applying for a state Public School Facility Improvement grant for the $294,949 match needed for the middle school boiler and chiller upgrade. Those Energy Service Company projects are expected to cost $413,006 and $771,198, respectively.

This is the first year with the new tax rate following reassessment in Schuylkill County, and Tamaqua Area’s new base tax rate is 8.4885 mills. The value of each mill is $1,899,724, and the net value of each mill after exemptions, such as Homestead/Farmstead, are applied is $1,622,486, Ligenza said.

The preliminary budget applies the maximum allowed tax increase of 5.6% for the board’s consideration, which would put the proposed millage at 8.9639.

The board could choose not to include a tax increase, offset the revenue shortfall through budget cuts or reduce the district’s fund balance, Ligenza said after the budget workshop Tuesday.