Grayson County staff say FY26 general fund faces roughly $3.5 million shortfall

County staff presented an initial overview of Grayson County’s fiscal year 2026 general fund budget and told the Board of Supervisors the current working estimate shows a roughly $3,500,000 shortfall.

"Our general fund operational budget is at a $3,500,000 deficit," said Nikki, a county staff member leading the review. She told the board the figure assumes the county funds a previously committed $1.98 million in capital improvement project (CIP) work to the schools this year.

County staff framed the shortfall as the product of several near-term cost increases: a state-mandated 1.5% bonus that the staff estimated will cost about $187,000; a 3% cost-of-living adjustment estimated near $260,000; health insurance increases (about $130,000); higher workers' compensation; and a required local effort increase for schools of roughly $327,000. Staff also cited a CIP commitment of $1,980,000 tied to the school system. Together, those items and other normal expenditure growth pushed total expenditure increases to about $3.1 million, staff said.

Revenue comparisons presented to the board show actual general fund receipts of about $27,000,000 in FY2023, a one-time bump to roughly $30,900,000 in FY2024 tied to a broadband project bond issuance, and budgeted revenue near $29,000,000 for FY2025 and FY2026. Staff noted that those revenue levels have risen only modestly while average local inflation measured across several items has climbed far faster over the same multi-year period.

The county’s stated budget priorities remain emergency medical services, broadband and 911 stabilization, and planning for future needs. Staff said the FY26 budget remains fluid: federal and state revenues that affect the county’s totals are still uncertain and could change the shortfall. "Those are some of our unknowns at this point," Nikki said.

County staff asked the board for direction on potential responses including spending reductions, re-timing capital projects, and levy/levy-rate decisions; staff also scheduled additional departmental presentations and a follow-up work session.

Board members and constitutional officers discussed budget-monitoring practices and year-end adjustments during the presentations; several supervisors asked staff to provide more department-level detail and handouts for subsequent meetings.

The county did not adopt a final FY26 budget at this session; staff described the presentation as an initial, high-level review and said budget figures will change as the board provides direction and as state and federal inputs firm up.