Lake Central board votes to advertise 2026 budget and higher tax rate amid state law changes and enrollment decline

Lake Central School Board on Monday voted to advertise the district’s 2026 budget, capital projects plan and five-year bus replacement plan and to advertise a higher levy rate after a 40-minute budget presentation by the district’s director of business services.

The board’s action opens the statutorily required public-notice period and sets a public hearing for the board’s next regular meeting; formal adoption will follow in October. Director of business services James told the board the presentation and the advertised amounts will be posted to the state Gateway system.

James told the board the district’s certified net assessed value is just under $6.2 billion for regular funds and about $6.8 billion for referendum-related parcels in tax increment financing districts. He said the state’s recent Senate Enrolled Act 1 (SEA 1) and related homestead credits and changes to standard and supplemental deductions are expected to reduce net assessed values for taxing units and generate a projected revenue loss for the district over the coming years.

"Because of the law change, those net assessed values are expected to go down," James said. "When the assessed value goes down and you need to raise the same amount of money, the tax rate goes up, and more people hit the tax cap. That means less revenue to local governments like us." He summarized the district’s projection as roughly $2 million less revenue next year, an additional $4 million the following year and a total shortfall approaching $7 million by 2031, and he said the district’s cumulative shortfall could reach about $45 million over eight years.

Nut graf: The board moved to advertise a budget that attempts to preserve current services — security, nurses, counselors, extracurriculars and transportation — while responding to a roughly 300-student enrollment decline and rising operating costs. The advertised levy rate will be higher than last year’s; the district framed the increase as an effort to recover revenue lost to the tax changes while noting most homeowners will still see a reduced tax bill because of the new homestead credits.

Most important facts: James said the district expects to receive $7,245 per pupil under the state funding formula for the coming period but that enrollment is trending downward. "This year, we're actually looking, as of right now, to be down 300 kids from last year's," he said. For the district that enrollment change and only a 2% state funding increase combine to an estimated roughly $1 million reduction in the education fund this year.

On costs, James highlighted rising utility and insurance bills and higher bus prices: the district’s quotes for a 72-passenger conventional bus are about $159,000 each for next-year deliveries, roughly a 30–34% increase from four years earlier. He also noted health-insurance and property-insurance renewals increasing and continued emphasis on cybersecurity and building security needs.

The presentation included the district’s recommended advertised amounts: education fund $73,500,000; operations fund $27,000,000 (up from $26,000,000 this year); debt-service fund $9,317,131; and referendum debt fund approximately $12,000,009. The district also proposed advertising a composite tax rate increase (the advertised rate rising from 86.87 to 90.55, per the presentation). James said the advertised rate includes the district’s request to recover part of the referendum shortfall caused by the state changes.

Capital and equipment plans were part of the same budget presentation. James summarized the three‑year capital plan (roof sections, parking lots, HVAC rooftop units, sinks, gym floors) and a five‑year bus replacement plan required by state rules. He said the district will continue routine items such as asphalt repairs, roof-section replacements and targeted building maintenance and is seeking permission to advertise purchase plans (including a snow‑plow dump truck and a lawn‑maintenance trailer) and to proceed with bus quotes for next-year orders.

Board action and next steps: After James’s presentation, the board approved a motion to advertise the 2026 budget, capital projects plan and bus replacement plan and the advertised rates. The motion was made on the floor and carried by voice vote (ayes); the board did not record a roll-call tally in the transcript. James said the advertised documents will be posted to the Gateway website this week and the board will hold the statutorily required public hearing at its next regular meeting on Sept. 22; formal adoption is scheduled for the board’s first October meeting.

Context and limitations: James repeatedly called the budget and capital plan "tentative," noting that state aid estimates depend on future student counts and state revenue forecasts. He explained that the calendar-year budget uses counts in February and that the district has not yet completed all counts referenced for 2025 and 2026. He also noted the district’s prior use of a building corporation and referendum debt (a 2011 referendum for a high‑school project and other capital work) that is handled in separate funds and is not subject to the tax‑cap adjustments in the same way as typical levies.

Ending: The board’s vote to advertise initiates the state-required public-notice and hearing process; members of the public can review the posted Gateway notice and appear at the upcoming public hearing to comment on the proposed 2026 levy and budgets.