Kingsport board approves FY25–26 budget revision after city funding stays flat; district to use fund balance

The Kingsport City Schools Board on June 10 approved a revised fiscal year 2025–26 budget that keeps the district’s total general purpose appropriation at $105,002,300 but increases the planned draw on the district’s fund balance after the city did not approve a proposed funding increase.

David Fry (staff member) told the board the package the board approved in May anticipated an additional $1 million from the city of Kingsport. The Board of Mayor and Aldermen kept its transfer for operations at $11,245,300 rather than the $12,245,300 the schools had expected, creating a funding gap the district plans to cover in part from its fund balance.

“The general purpose budget is still $105,002,300,” Fry said, noting that the difference will increase the amount drawn from fund balance. Fry said the district’s June 30, 2024 fund balance was about $13.5 million and that, after prior appropriations and projected surpluses, the district expects to end the fiscal year with roughly $10.44 million. If the board approves the budget as revised, Fry said the district would project a beginning‑of‑year fund balance for FY26 of about $7,442,060, roughly 7% of the operating budget.

Fry outlined recent budget moves that have already reduced available reserves: about $1,485,000 in expenses were funded with leftover ESSER dollars, and the district has appropriated roughly $5.5 million since June 30. The packet shows the district is keeping a classified employee bonus funding line (about $600,000) and $300,000 for special education supports; Fry described the net change as increasing the planned fund‑balance use to roughly $2,072,400 for operations rather than the originally contemplated lower amount.

Under state guidance cited in the meeting, the Tennessee Department of Education does not allow boards to appropriate fund balance below a minimum threshold; Fry noted the district’s projected 7% level remains above the commonly observed 3% guideline.

Superintendent Doctor Hampton (Superintendent) used his remarks after the vote to urge community advocacy and outlined planned outreach. He said sales‑tax adjustments and other near‑term uncertainties could reduce projected surpluses and that the district will produce a one‑page “fast facts” document showing the funding shortfall and the effect of a recent county decision on property‑tax distributions.

“We are going to be pretty vocal about this topic,” Doctor Hampton said, saying he and staff will share materials with parent groups, booster organizations, elected officials and community leaders. He described a recent Sullivan County Commission vote to reduce the percentage of property taxes allocated to education — a decision he said affected all three Sullivan County school systems — and encouraged residents to contact county commissioners or consider running for office.

Board members noted the difficulty of finding recurring savings without affecting personnel or extracurricular programs, saying non‑people costs such as travel and professional learning have limited potential to cover a $1.5 million shortfall. The board voted to approve the revised budget; a motion to approve the amended Kingsport City Schools fiscal year 2025–26 budget passed by voice vote.