Muscle Shoals City Schools presents proposed $44–48 million FY2026 budget at first public hearing

Sherry, a finance staff member for Muscle Shoals City Schools, presented the school system's proposed fiscal year 2026 budget at a public hearing, saying, “Tonight is the first budget hearing for the proposed budget for fiscal year 2026.” The proposal covers the period Oct. 1, 2025, through Sept. 30, 2026, and the board will hold a second required hearing on Sept. 11, 2025.

Sherry told the board that the system currently lists 337 full-time employees (338 budgeted), and cited a 20-day enrollment count used for state funding: the system was funded on 2,847 students while her informal count the prior Friday was 2,802 (the transcript notes 114 early-learning students are excluded from funding counts). She said 75% of certified staff hold a master's degree or higher and that certified staff average 15 years of teaching experience.

Sherry reported proposed revenue for fiscal 2026 at about $44,000,000 in one part of the presentation and later summarized total revenues projected at $45,000,000, with $8,600,000 in unreserved funds. She said roughly 53% of revenue is expected from state funds, 36% from local sources and 8% from federal sources; about 3% was labeled “other.” She described the state foundation program as the primary funding mechanism and explained that foundation funding is driven by the post–Labor Day 20-day student count.

On expenditures, Sherry estimated overall spending between about $47,000,000 and $48,000,000 depending on pending allocations. She said instruction and instructional support make up the largest shares—48% of total spending in one slide and 63% of total budget elsewhere in the packet; looking only at the general fund, she said 71% of that fund would go to instruction and instructional support. Personnel costs represent about 77%–78% of total budgeted spending, she said.

Sherry reviewed several specific funding items and uncertainties. She described new state legislation she called the “Renewing Alabama's Investment in State Education Act (2025 254),” saying it created weighted allocations for student categories and that Muscle Shoals received additional money in categories such as special education ($157,883 reported), poverty/at-risk, English-language learners and gifted students. She said the system received roughly $3,000,000 in “A and T” carryover money from fiscal 2025 that must be spent by Sept. 30, 2026 and that she would present a budget amendment when those dollars are assigned to line items.

Federal program allocations reported included IDEA and Title I; Sherry said projected federal-program revenue is about $2,200,000 but Title II and Title IV allocations remain unreleased and could affect the district’s ability to fund professional development. She said the district remains in the Community Eligibility Provision (CEP) for meals.

On local revenues, Sherry projected about $7.8 million from local ad valorem (property) taxes and described county and city sales-tax appropriations: a $50,000 county allocation that must be used for school security and an ongoing city sales-tax appropriation (about $1.8 million projected). She noted statewide debate and pending litigation over the distribution of the state sales/use tax (SSUT) and said the district might evaluate whether to join lawsuits but no decision had been made.

Sherry summarized the district’s debt-service obligations: a 2013 reissue of a 2020 warrant with 2026 payment of $621,000 (matures 2038); a 2023 warrant with a 2026 principal payment of $222,000 (matures 2042, interest 3%–4.1% across term); a metro loan used to purchase a pre-K facility with a 2026 principal payment of $43,000 and interest of $22,000 (matures 2041); and a QSAB obligation with a final payment due Dec. 15, 2025, which Sherry said will free about $117,000 for capital in 2027.

Sherry said the district’s current fund balance at Oct. 1, 2024, was $11,000,000 (about 4.78 months of operating expenses). For FY2026 she projected a 3.2-month operating balance and a projected reserve (fund balance) of 3.54 months. She and Dr. Holden discussed a possible one-time supplemental pay for staff but said uncertainty over Title II/Title IV funding and other allocations prevents a final decision; Sherry said the board would continue discussions and potentially decide at the Sept. 11 hearing. Dr. Holden commented during the meeting, saying, “I think it'd be great,” when asked to add to that portion of the discussion.

No formal votes or motions were recorded during the hearing. Sherry asked attendees to sign the state-required sign-in sheet documenting the public hearing and invited public input through a response form included in the budget packet. She also noted that the system’s annual audit is prepared by an independent CPA firm and that financial statements and a summary check register are available on the school system website.

Why it matters: the proposed budget establishes staffing, instructional funding and capital priorities for Muscle Shoals City Schools and depends on pending state and federal allocations. The board must hold a second hearing and finalize a budget by the state deadline of Sept. 15, 2025.