Mr. Pangweig, the district budget presenter, told the board that the district currently forecasts a $9.7 million deficit for the 2024‑25 fiscal year and continuing deficits in out years under current assumptions. "This year, 24‑25, we're anticipating about 9,700,000.0 in deficit," he said, and he said the forecast assumes flat enrollment and still‑uncertain compensation and inflation adjustments.

Why this matters: staff said the structural deficit would push the district's ending fund balance toward negative territory by later years without corrective action. The board policy calls for a minimum 5% unassigned fund balance; Mr. Pangweig showed models that quantify options to reach that floor. "If we make budget balancing solutions of 3,000,000 each year starting in 25‑26, we will be able to achieve the 5%," he said. He also modeled a more aggressive path: making $6,000,000 in solutions per year for four years would, in his projection, restore the district to a roughly 10.5% ending fund balance and eliminate the structural deficit.

Funding headwinds: presenters flagged state and federal uncertainty. District staff noted possible reductions in federal grant titles beyond Title I and that changes to school‑meal provisions could affect meal funding for individual schools. "Title 2, Title 3, Title 4, and Title 6 — those amounts, approximately $5,000,000 for our district — if those are not funded, we're going to lose about $5,000,000," Mr. Pangweig said. Staff said proposed changes to Community Eligibility Provision (CEP)/Provision 2 thresholds could negatively affect about 33 district buildings if thresholds change.

Special education and other underfunded categories were highlighted as large, structural gaps. Staff presented statewide shortfalls expressed as five‑year funding gaps, including a roughly $85.5 million special‑education gap cited in their materials, and local underfunding for maintenance, supplies and operations (MSOC) and transportation. In the budget materials staff showed MSOC underfunding at about $43.2 million and transportation underfunding at about $3.9 million across the referenced period.

Board conversation and next steps: directors asked about revenue options, including billing Medicaid for eligible special‑education services and municipal partnerships (examples were discussed such as behavioral health or local cannabis-tax revenue used by some jurisdictions). The board asked staff to research potential revenue sources and operational efficiencies and bring options back for further discussion. "Any kind of revenue would be supporting us," the presenter said, and the board identified three broad buckets for addressing the gap: find efficiencies, pursue revenue enhancements, and reduce expenditures.

Staff emphasized timing and uncertainty: enrollment, collective bargaining settlements and state budget decisions remain variables. Finance staff recommended a mix of solutions that aim to protect classroom services while restoring reserves. The board directed staff to return with more detailed analyses and options at a later meeting.