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Preliminary FY2026 budget projects $7 million deficit without additional revenue; salaries and benefits drive costs
Summary
CFO Lonita Broom presented a draft FY2026 general fund budget showing an estimated $7 million gap driven primarily by proposed salary increases, rising health benefit costs, and higher maintenance and safety spending. The district is not recommending a millage increase in this draft.
City Schools of Decatur27s chief financial officer presented the district27s preliminary fiscal year 2026 general fund budget, projecting a possible $7 million shortfall in the draft as presented Feb. 11.
Why it matters: Personnel costs — teacher and staff salary increases, rising employer health benefit contributions and a state-proposed rise in the Teachers Retirement System (TRS) contribution — make up roughly 86% of the preliminary budget. With expenditures rising faster than projected revenue, the district faces either drawing on fund balance or raising property tax revenue to close the gap.
Key figures presented by Lonita Broom, Chief Financial Officer: - Projected FY2026 deficit in preliminary draft: approximately $7,000,000. - Proposed salary guidance: teachers to receive a minimum 4% increase; all employees a minimum 3% in the draft budgeting assumptions (board earlier set compensation as a priority). - District revenues were modeled with a 5% local property tax growth assumption pending final digest projections from the county assessor and state budget action. - Employer TRS contribution proposed increase (state proposal): from 20.78% to 21.91% — an additional cost included in preliminary numbers. - Maintenance & operations and safety line items were increased (preventive maintenance, legacy parts, custodial costs, and licensing for new safety systems were cited).
Administration27s approach: the budget was built using a zero-based review and requires all operational requests to be justified against the strategic plan. The CFO advised the board that increasing the millage by one mill would produce roughly $3 million in additional revenue, but the administration was not recommending a millage increase in the first draft.
Next steps: staff will update revenue projections after receiving the county27s digest estimate and the state budget; a second draft will be presented in March, with public hearings and final adoption scheduled in May–June.
Ending: The board and administration noted that midterm changes in state policy and the final digest could materially change the FY26 outlook; the board will revisit budget adjustments in the coming calendar weeks.
