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Board hears state budget changes that could limit districts’ carryover balances; New Albany expects to move funds to capital
Summary
Board members and administrators discussed the recently passed state biennial budget, limits on carryover balances (40% cap discussed), potential impacts on levies and local budgeting, and the district’s plan to transfer $13.5 million from the general fund to capital and other funds to remain compliant.
Board members and district administrators spent the meeting’s longest block outlining how the recently completed state budget could change school-district budgeting statewide and for New Albany-Plain Local specifically.
Board liaison remarks and Superintendent Michael Sawyers explained that the biennial budget (referred to in the meeting as the budget bill) is before the governor and contains a provision limiting how much a district may carry forward into the next year (the board discussed a 40% cap). “The carryover balance basically said that for school districts that have money left over in their budget, that you basically can't carry over from year to year more than 40% of your...expenditures,” a board liaison said. The meeting’s finance discussion focused on the operational consequences: districts with large cash balances will have new constraints on holding reserves for multi-year projects or to avoid near-term levy requests.
Treasurer Becky Jenkins described immediate local steps the district will take to comply with the new carryover limits and to protect funds for ongoing capital needs. Jenkins asked the board to approve appropriation increases and transfers of about $13.5 million from the general fund into other funds: $7.5 million to permanent improvement (an increase of $5 million from prior practice), $8 million to the newly created fund 070 (capital projects), $500,000 to fund 035 for termination/retirement payouts, and routine transfers for the community center and other line items. Jenkins said some transfers are intended to preserve funds for capital projects where there is longer allowed spending horizon (permanent improvement fund versus general fund).
The board discussed implementation choices and legal questions raised by the new law. Administrators said some districts may be able to keep above‑40% balances in the general fund if they pass a board resolution earmarking the excess for capital projects, but that language, timelines and legal interpretations remain uncertain and likely to produce further guidance or litigation. Several board members and administrators warned the change could make operating-levy campaigns more frequent; one board member said the new rules “will force districts to change the way that they manage their budgets.”
Jenkins said the district’s year-end numbers were not yet final as of June 30 but that revenue finished slightly higher than projected and expenditures came in under projections (largely because of encumbrances and some large purchase orders that will carry forward). She said the district will finalize year-end closing on July 1 and will bring final figures to the board. The transfers and appropriation modifications discussed at the meeting were approved by roll call vote.
