District proposes budget amid federal grant freezes, $1.8 million shortfall and staffing pressures

Levy County's finance director told the school board the district faces a tightening fiscal picture driven by state and federal funding changes, rising costs and student scholarship growth; the board approved advertisement of the tentative budget and related public notices.

"We found out that the final payment to all school districts statewide was about $47,000,000 less than expected," said Staff member (finance director), describing a June 26 notice from the state. She said Levy's share of the statewide reduction was about $60,000 and that the state is working on a solution but had not provided one by the meeting.

Federal funding changes: Staff described a broader, fast‑moving federal picture that included withheld or frozen allocations. The finance presenter and the district's federal grants lead said Title I Part A and IDEA were expected to be funded (with modest reductions), Title II allocations were withheld for 2025–26, Title III (ESOL) had limited roll‑forward funds, and Title IV (student enrichment/STEAM/mentoring) was withheld; the presenters said the state saw roughly $400,000,000 of federal instructional funds frozen at a point this summer.

Budget numbers presented - Current year closeout: The district reported a deficit of about $845,000 (down from $1.8 million during the closing process after using transfers). The finance director said transfers from capital outlay reduced the deficit but warned capital is limited and used for maintenance and bus purchases. - Revenue shocks: Statewide shortfall cited at roughly $47,000,000; local impact stated about a $60,000 reduction. Scholarship growth statewide and student counts shifted funding; presenter said scholarships increased about 3 percent while district growth was under 2 percent. - Recurring cost pressures: An estimated FRS (retirement) increase around $150,000 for the district; rising health insurance premiums and utility costs were cited as additional pressures. - Fund balance and reserves: The district began the prior year with roughly $10,000,000 in fund balance. After the projected reductions and transfers, the presenter said the district's fund balance is expected to fall toward $9.2 million moving into next year; a continued $1.8 million hit would reduce unassigned/assigned balances further and could push the reserve down over subsequent years.

Planned management actions: The finance presenter outlined options to reduce costs with minimal classroom impact: review travel and student travel, examine software and copier agreements, pursue energy savings, increase allowable capital transfers, and freeze some vacancies to realize savings through attrition instead of immediate layoffs. She said layoffs would be considered only if the district could not pay bills.

Board decisions: The board approved publication of required notices and the summary advertisement for the proposed budget so the district can meet the statutory timelines; the tentative budget will be presented and adopted at the scheduled hearing (advertisement dates were set for publication in the Gainesville Sun with the tentative adoption meeting set for July 31).

What remains unresolved: The district said it did not have the state's fourth calculation at the time of the meeting and that the final revenue figure for 2025–26 could change the projections. The district also said it was still monitoring federal grant decisions and actuarial results for health insurance to determine whether it will need additional transfers or increased employer premium contributions during negotiations.