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Fulton board warned of healthcare cost pressure; budget cuts of roughly $4 million proposed to close gap
Summary
District finance staff presented February financials and a draft budget showing health insurance as the primary driver of a projected deficit; staff said they have identified approximately $3.9–4.7 million in reductions and may seek permissive legal options to use reserves if necessary.
Fulton City School District finance staff told the board the district’s February financials and draft 2025–26 budget remain under active revision, and flagged health insurance as the largest driver of an impending deficit.
Why it matters: The district’s projected revenue for the coming year was presented at about $94.65 million; staff said expenses had been trimmed toward roughly $95.3 million but more work remained to balance the budget. Health insurance costs, staff said, have risen sharply in recent years and currently project to put the employee‑benefits category in the red.
District Business Manager Kate (presenting) broke out employee benefits and said health insurance was the line requiring close attention. She summarized a 10‑year chart of health costs and told the board the line has climbed steeply since 2021–22 and is projected to be overspent in the current year. Staff said individual month projections have ranged (in recent updates) between about $3.0 million and $3.2 million for health insurance, and that the district’s largest reserve — labeled the accrued liabilities/employee benefits reserve — is about $3.8 million.
The district’s auditor and finance staff told the board they are exploring legal means to utilize reserves: the auditor said there may be a permissive referendum pathway to access the accrued liabilities reserve if required for current‑year coverage; staff said the auditor would continue to research the applicable law. The board was also told that the district has invested short‑term cash and recently moved funds into NYCLASS to earn higher interest on reserves.
Staff said reductions identified to date total roughly $3.9–4.7 million and that budget work would continue through the district’s schedule of budget workshops. The finance presenter said the draft budget still shows the program portion as the largest share (about 75.3 percent) with administrative ~10.1 percent and capital ~14.6 percent — percentages similar to the current year.
Key dates and propositions: Staff outlined the budget calendar: a budget workshop was scheduled for April 1, a board meeting on April 8 for further review, adoption targeted for April 22, and the school budget vote set for May 20 (9 a.m.–9 p.m.). The proposed ballot will include four propositions: the main budget, purchase of two replacement passenger vans for student transportation, a potential property sale proposition (pending seller response), and the library tax proposition.
Ending: Finance staff said they will return with further refinements; the board asked for continued updates and noted the importance of protecting classroom program dollars while resolving the benefits shortfall.
