Board hears plan to close $7.7 million budget gap; city payments, state aid, and a short-term note discussed

The Mount Vernon City School District Board of Education was told April 1 that the district faces a $7,700,000 budget gap for the 2024–25 school year and is weighing a mix of state aid, a possible short-term borrowing plan and outstanding city tax payments to close it.

Acting Superintendent Veronica Smith and Jose (the district—s assistant superintendent for business) told the Budget & Finance Committee that projected expenditures for 2024–25 are about $280,000,000 against anticipated revenue of $273,000,000, creating the $7.7 million shortfall. Committee members said the district has requested additional state aid and sent a memo to the state education department and local legislators advocating for the funding.

Committee members described three primary paths to resolve the shortfall: (1) additional state aid that requires legislative approval, (2) the city completing payments owed to the district for pre-2020 taxes, and (3) issuance of a short-term budget note that would be repaid over roughly two years if necessary. Jose said the district could pursue a budget note if other options did not materialize.

Why it matters: trustees were told that the city—s outstanding payments could eliminate the gap. Officials said the city is scheduled to make a series of payments of $450,000 through September 2025 under an existing agreement; the city also told the district it expects to owe about $7.7 million by June 2025 for taxes predating 2020 and for 2020–21 and 2021–22. Board members said they will meet with the city this week or next to discuss a payment agreement.

The committee outlined the budget timeline: Jose will present the proposed 2025–26 budget on April 9 at a special board meeting; the board is expected to adopt the 2025–26 budget on April 22; a public budget hearing is scheduled for May 6 and the annual budget vote and school board election is set for May 20. Officials said the proposed 2025–26 budget may combine additional state aid, a modest tax increase, a new payment agreement with the city and internal cost-saving measures.

Questions from trustees focused on the reliability and timing of the city payments and on contingency plans if state aid is not approved. Jose said the district has implemented a budget freeze earlier in the year and runs monthly cash-flow and fund-balance projections; the budget note option would allow the district to bridge the current year and be repaid in roughly two years if other revenue sources do not come through.

Board members said they will continue advocacy with state officials and scheduled a follow-up meeting with the city to seek clarity on the amount and timing of the outstanding payments. No formal board action to adopt a balanced budget for 2024–25 was taken at the April 1 meeting; the items described were committee reports and planning steps.