Buncombe County Schools finance staff project up to $9.9 million shortfall for 2025-26 amid funding and federal-policy uncertainty

Buncombe County — Buncombe County Schools’ finance staff warned the Board of Education on Wednesday that the district could face a large budget gap for the 2025–26 school year as state and federal funding remain uncertain and local revenue assumptions continue to change.

Chief finance officer Tina, presenting the district’s "25/26 outlook on the budget," said the BCS budget office projects "a shortfall of approximately $9.94 million" for 2025–26 based on the assumptions the office used. Tina said that projection assumes the district does not receive the roughly $3.9 million the county took from the district midyear this year; if that amount were returned, she said, the shortfall would fall to roughly $5.4 million.

The projection rests on multiple uncertain items, Tina told the board: pending state bills that could increase teacher and principal pay, the governor’s larger budget proposal, an executive order referenced in the meeting that would alter federal education administration, the timing and administration of federal dollars, potential changes to Article 39 local capital funding, and ongoing FEMA and insurance reimbursements tied to damages from Hurricane Helene.

Why it matters: The district’s operating budget is heavily personnel-driven; Tina said about 95% of state allotments go to salaries and benefits, and local appropriations pay a large local supplement and recurring classified salary changes approved by the county. Small percentage swings in assumptions, she said, translate into multi-million-dollar impacts.

Key figures and assumptions cited in the presentation: - Tina said the district currently counts 661 positions funded with local dollars in the projected budget and that roughly 238 full-time-equivalent positions are funded by federal programs. - The budget office’s modelling assumed a roughly 3.6 million increase in local salary-and-benefit expenses and a $660,000 increase in federally funded salary expenses, which together can create roughly a $4.2 million increase in personnel costs borne by local funds. - Tina said the county appropriation for the district this year was about $95 million after the county removed $3.9 million midyear; she said she built the projection assuming that $3.9 million is not returned. - She reported Buncombe County’s unrestricted growth rate was shown as negative 3.49% by the county; Tina said the district has requested detail from the county on how that rate is calculated but has not received the breakdown. - For the district’s early-childhood learning-lab enterprise, Tina presented three scenarios: (1) if the county ECE grant continues at the same level, a projected shortfall of about $43,000 and a breakeven tuition of $600/month (from the current $525); (2) if the county ECE grant is discontinued, a projected shortfall of roughly $304,007 and a breakeven tuition near $1,075/month; and (3) returning to the pre-grant model would show a shortfall near $146,360 and a breakeven tuition around $800/month.

Tina walked the board through local revenue indicators she reviewed — property tax collection snapshots from Buncombe County and month-over-month taxable-sales data from the North Carolina Department of Revenue — and said those data show sales-tax recovery following Hurricane Helene similar to the coastal recovery after Hurricane Florence. She cautioned, however, that timing for FEMA and insurance reimbursements is uncertain and that several revenue streams could be delayed or repriced.

Federal and state funding uncertainty was a recurring theme. Tina listed four state bills under consideration that could affect salary allotments: House Bill 192, House Bill 420 (Sound Basic Education for Every Child), Senate Bill 659 (Investing in North Carolina Act), and Senate Bill 649 (restoring advanced pay/master’s pay). She also told the board that an executive-order action at the federal level discussed in her presentation raised questions about how U.S. Department of Education and U.S. Department of Agriculture funding would be administered in the future and what timeline would apply for any pass-through to local districts.

Tina and board members emphasized the potential operational impacts if revenues are reduced or delayed: cuts to student services, difficulty meeting payroll if fund balance is depleted, contracted services where positions cannot be filled (for example, contracted psychologists and HVAC contractors), and uncertainty about the district’s ability to charge full indirect costs to school-nutrition programs under possible future rules.

Superintendent Dr. Jackson echoed the finance presentation late in the meeting, noting that restoring the county’s $3.9 million would narrow the gap and that prior fiscally conservative decisions left the district in a stronger starting position than it might otherwise have been. "We would be within our means this year" if the county restoration and other assumptions held, Dr. Jackson said, while reiterating the district still faces a multi-million-dollar shortfall under current projections.

Board discussion and next steps: Board members pressed for detail on the county’s unrestricted growth calculation and asked staff to continue tracking sales-tax and permit data, FEMA and insurance reimbursements, the state budget timetable (the session is running late), and the status of the Article 39 local bill that would change allowable uses of that local funding source. The meeting concluded with an announcement that the board will hold a special called budget work session on April 25, 2025, at 1 p.m.

Votes and formal actions at the meeting were limited to routine procedural motions: the board approved the meeting agenda and later adjourned. No budget or appropriation actions were taken.

Tina and Dr. Jackson repeatedly framed the presentation as a set of projections dependent on multiple unknowns. Tina told the board she had cited sources on each slide for the data shown, including county tax-collection pages, the North Carolina Department of Revenue, the Local Government Commission and the NC Department of Commerce.

Ending: The board scheduled further budget work and advocacy, including continued outreach to county commissioners and state legislators. Tina and district staff said they will return with updated numbers as the state budget, federal rules and county decisions become clearer.