Hudson School District projects $13.7 million operating shortfall this year as board allocates $15 million for construction

Bonnie, presenting the district’s 2025 annual budget summary, told the Hudson School District Board of Education that state-level changes and local valuation shifts will alter the district’s revenue picture for the coming year.

The state’s 2025–27 operating budget set per‑pupil aid at $742 (no increase), and the state adopted a $325 increase to the revenue limit calculation per pupil. Special education categorical aid is estimated to rise to 42% from 30%, a change Bonnie described as “very appreciative by the district.” She said the district is projected to lose about $750,000 in equalization aid because Hudson is a property‑wealthy district and the aid formula redistributed dollars based on statewide factors. Bonnie said the district will receive its final allocation from the state on Oct. 15.

Why it matters: the district is authorizing capital spending from its fund balance while operations show a shortfall. Bonnie explained the district plans to transfer $15 million from fund balance to finish referendum construction projects; that transfer is recorded under “other purchased services” and explains a 158% increase in that expenditure category. She summarized the bottom line: “We will be operating in a deficit this year of $13,700,000, but that is due to the board’s allocation of the fund balance to finish those referendum projects.”

Highlights and context - Property valuation and levies: Bonnie reported estimated taxable valuation growth of 4.4% for the district (below the statewide average she cited at 8.07%). She said the district will present an operating levy of $53,000,000 and a debt service levy of $8,900,000 in the annual meeting resolution. The district plans to shift some levy between funds (moving debt service levy dollars into Fund 10), which makes year‑to‑year line items look larger even when the net tax impact is limited. - Fund balance and reserves: the district reported a projected unassigned fund balance of about $30,000,966 at the end of the 2024–25 fiscal year, and retains a self‑funded health fund balance of $2,900,000. Bonnie said some restricted amounts (E‑Rate rebates, Indicator 14 incentive grant, school‑based mental health grant, career tech funds) are being rolled forward to the next year for their intended uses (for example, welding lab updates at the high school). - Staffing reductions and settlements: the district has implemented roughly $2.7 million in operating reductions over three years, with about $842,000 in reductions in the most recent year; all employment group settlements are finalized and included in the budget. - Long‑term debt: the district listed outstanding borrowing tied to prior referendums and projects and noted scheduled principal/interest and a $720,000 budgeted prepayment; the total debt levy figure shown was $8.9 million for the upcoming year.

What administrators said and next steps Bonnie confirmed the district will get final state allocation numbers in October and that detailed notes will be added to budget charts to avoid misinterpretation of fund transfers (for example, the jump in purchased services reflects construction spending, not routine operating purchases). Board members requested clearer footnotes and a summary of the multi‑year staffing reductions for the annual meeting booklet and public website. Bonnie said the document will be posted on the district website and is attached to the agenda.

Ending Administration did not present a formal budget adoption vote at the work session; the presentation was a staff budget preview intended to inform the board and the public ahead of the district’s annual meeting where levies and the formal operating budget document will be considered.