Board adopts FY26 budget as administrators warn Senate Bill 3 could cut district revenue

The Francis Howell R-III School Board on June 19 approved a balanced fiscal year 2026 operating budget and related transfers after the district’s finance chief told trustees a recent state law could sharply constrain future property-tax revenue.

Chief Financial and Operations Officer Carol Embry said the recommended FY26 operating budget targets an operating fund balance of roughly 27.3 percent at June 30 and assumes a state “equity target” increase of $3,200,000 in the coming year (Emby noted that figure could be as high as $6,400,000 if fully funded). Embry told the board that total governmental fund revenues in the budget are roughly $292.2 million against expenditures of about $333.6 million, a gap explained in part by continued spending down of prior bond proceeds.

Embry told the board that the Missouri legislature on June 14 signed Senate Bill 3, a property-tax relief measure that effectively freezes the assessed value growth for many residential parcels at September 2024 levels unless voters in a county opt to reject the freeze on a local ballot. "Because residential real estate represents nearly 76 percent of our tax base, if those revenues do not continue to grow to meet debt-service demands, that burden will be placed on other properties," Embry said. She said DESE (Missouri Department of Elementary and Secondary Education) notified the district on June 18 that current‑year formula funding left the district about $173,000 short of a fully funded formula for this year.

Board members asked how to prepare if the county places the measure on the ballot; Embree (sic) responded that administrators will develop lists of potential savings and that most revenue shortfalls are ultimately borne by personnel costs. Director Pushkar asked whether the district should accelerate curriculum purchases (for example, math materials) to use current funds before revenues tighten; Embry said the administration will develop options for board consideration.

The board voted to approve the consent and finance motions as presented. Director Pushkar moved and Director Ponder seconded the motion to approve the FY26 operating budget recommendation and associated transfers; the motion carried on a voice vote. Trustees also approved a debt-service budget amendment tied to a recent defeasance and authorized transfers from the general fund to the capital fund (the guaranteed-tax base transfer was described as currently estimated up to $7,000,000).

Embry flagged several other fiscal items for the board: an ongoing transfer into the district health/self‑insurance fund (previously discussed at $6,000,000 and under continued monitoring), roughly $35–45 million in construction work scheduled this summer, redistributing about 4,000 technology devices, and pending the annual financial audit engagement with final acceptance expected in November or December to meet DESE deadlines. She said further budget amendments will be recommended as new information becomes available.

Why this matters: the district’s operating levy is already constrained by the Hancock Amendment and related formulas, Embry said, and the combination of constrained assessed‑value growth on residential property plus ongoing inflationary pressures on insurance, energy, and personnel costs creates a multi‑year revenue challenge that will require board discussion and possible program adjustments.

The board did not take additional formal direction beyond approving the recommended FY26 budget and the listed transfers; Embry and staff said they will return with scenarios and recommendations as DESE updates and county ballot decisions become known.