Cabell County Schools projects $7.1 million shortfall for FY26, cites enrollment drop and rising costs

Cabell County Schools staff told the Board of Education on May 5 that the district’s proposed fiscal 2026 operating budget includes a projected $7,134,000 shortfall and would draw on reserves to balance next year’s obligations.

“We are projecting about a $7,100,000 shortfall for next year,” Mr. Rotgen, a district staff member presenting the budget, said. He told the board the district could use carryover funds to cover the gap but emphasized the county’s legal requirement to adopt a budget no later than May 30.

The shortfall reflects several factors the staff identified at the work session. Student headcount has declined: the district lost 258 students between the most recent Oct. 1 counts, and staff said the district has lost about 2,043 students since a peak year, an average decline of roughly 204 students per year. Because state aid is driven by enrollment, the decline reduces revenue even as many operating costs rise.

Rotgen also highlighted growing benefit and insurance costs. He said total PEIA (Public Employees Insurance Agency) costs for next year across the general fund and food service are about $17.7 million, with the state providing roughly $15.5 million and the district planning to cover about $2.27 million locally. He told the board that liability and property insurance premiums paid through BRIM have risen from roughly $736,000 in 2022 to an expected $2.3 million next year.

Special education spending is another major driver. Rotgen said special education expenditures approach $29.5 million for the coming year versus about $20.5 million in 2020. He told the board that the district added more than 70 special-education positions over a recent four-year span and estimated those positions account for roughly $3.8 million of the increase.

Staffing levels above the state funding formula also affect local spending. Rotgen showed historical charts indicating the district employs more staff now than a decade ago while enrollment has fallen; he described a post-COVID carryover of positions previously paid from federal relief funds that now appear in the general-fund totals.

Rotgen said the proposed budget document collapses the district’s totals into a one-page summary that would be submitted to the state Department of Education after board action. “By law, you are required as a board to have a budget adopted no later than May 30,” he said. He also described the legal definition of a balanced budget: “A balanced budget in legal terms is you spend no more than the total amount available, including your savings.”

District staff told the board they plan to present the proposed budget for board approval on May 20 so the Department of Education can review the submission; the presenter said the department’s review is routine and focuses on accuracy.

Board members and staff discussed the possibility of risks outside the district’s control, including potential federal funding changes to child nutrition (the district currently participates in universal free meals through a federal program) and unspecified supplier cost increases tied to tariffs. Rotgen said the budget assumes the status quo for federal funds and does not include contingency padding for tariffs.

The presenter and board members said they plan to continue seeking cost savings between the May 5 work session and the May 20 board meeting and recommended that any unresolved questions be addressed before the approval vote. Rotgen estimated that relying on reserves at the current projected drawdown rate would exhaust carryover in roughly four to five years if structural changes are not made.

The board did not take a formal vote on the budget at the May 5 work session; staff characterized the meeting as a presentation and question-and-answer session ahead of the scheduled May 20 action.