Levy County finance staff warns of possible $1.5 million shortfall as enrollment and voucher growth cut state funding

Miss Lake, a district finance staff member, told the Levy County School Board at a finance/budget workshop that state changes and local enrollment losses leave the district facing a potential $1.5 million deficit and downward pressure on reserves.

"This meeting is not the start of TRIM," Miss Lake said as she opened the presentation and walked the board through the district's timeline and state calculations. She described the newly released Senate Bill 2500 and the third FEFP calculation as the basis for the district's preliminary figures.

The presenter said the state education budget rose from about $15.6 billion to $15.8 billion in the most recent proposal, a 1.73% increase, while the district's base student allocation (BSA) increased by roughly $42 (about 0.78%). She warned that some categorical funding was moved into new line items and that private-school voucher funding continued to grow faster than the BSA.

"Private school voucher funding has increased by 3%, which is above inflation," Miss Lake said, and she noted the Family Empowerment Scholarship count has been difficult to forecast. She cited a county-specific underforecast last year — the state projected about 437.77 scholarships for Levy County but the district experienced about 583.5, an undercount of roughly 145.7 scholarships — a gap that contributed to last year’s proration and could reappear.

Miss Lake walked the board through revenue and expenditure estimates: the district expects to expend roughly $58,000,000 while current revenue projections look lower. She said collections are being estimated at about 99.5% and that the district needs roughly $2.7 million more in collections by June 30 to meet that target. She also said that, because of grants and timing, the district typically runs negative cash flow until the first county check arrives in December or January and that average monthly payroll is about $1.7 million.

The presenter listed cost pressures the board must consider: Florida Retirement System (FRS) contribution increases (estimated to cost the district about $150,000), rising health insurance claims and costs (an anticipated additional $500,000 in the general fund), and a previously approved compensation package that used about $1.8 million of general fund resources (including $400,000 in bonuses). Miss Lake estimated that after anticipated adjustments the flexible-dollar portion of the budget could be roughly $500,000 in the red.

She described fund-balance targets and liquidity: the board’s 5% target equates to roughly $2.6–$2.7 million; the state-required 3% is about $1.6 million. Miss Lake said the district’s fund-balance ratio was expected to decline from about 18.4% to 14.9% under the current outlook.

Board members asked about enrollment and program alternatives. Miss Lake said district K‑12 enrollment has declined, with district enrollment down by 64 students and charter enrollment down by 3 since May 2020, while homeschool and scholarship participation has risen; she said roughly 1,500 students who previously would have been district students were now enrolled elsewhere, costing the district about $8 million in revenue.

Miss Lake said the board faces three broad responses if the gap materializes: use fund balance, cut programs or positions, or find revenue offsets. She recommended cautious, incremental adjustments rather than immediate large-scale reductions.

Board members and staff discussed potential timing and uncertainty tied to the fourth state FEFP calculation; Miss Lake cautioned that figures could change when the next state calculation is released and when final TRIM decisions are made.

The presentation closed with a reminder that several categorical changes (including a new academic-acceleration categorical that holds harmless amounts for a year) shift flexibility and that the district must plan for potential proration and ongoing growth in scholarship programs.