Board hears budget presentation highlighting circuit-breaker losses, insurance spikes and plan to limit capital spending from operations fund

On Sept. 22 the New Albany-Floyd County Board of School Trustees held a public budget hearing during which district finance staff reviewed the proposed 2026 budgets, fund structure and financial pressures facing the New Albany Floyd County School Corporation.

District presenter "Mr. Street" walked the board through fund-by-fund details, emphasizing that the district’s accounting is "fund driven" and that education, operations, debt service and referendum funds have distinct purposes and cannot be co-mingled. He said the education fund will see a roughly neutral change because a modest state formula increase was offset by a drop in average daily membership (ADM). "We're looking at pretty neutral funding," Street said, noting that the state’s recent decision to fold curricular materials into the education fund makes revenue appear higher on paper while creating accounting complications.

Street told the board the operations fund is under particular stress from the state’s circuit-breaker and other legislative changes. He said the district expects the circuit-breaker loss to increase by about $2 million this year, putting the district’s total property-tax cap loss near $4,000,000 in the current projection from state reviewers. That shortfall, he said, will mean the district will not fund large capital projects or bus replacement from the operations fund and will instead rely on bonds and leases for those items.

Street reviewed specific program and capital items included in the budget documents: emergency repair and equipment allocations, an anticipated bus replacement package tied to a bond (11 buses planned for 2026: two diesel, one propane, four special-education buses and four activity buses) and the typical predominance of salaries and benefits in the education fund. He said the district projects an assessed valuation (AB) increase of about 11% that may allow the district to maintain its tax rate near $1.05 per $100 of assessed value, but cautioned that legislative changes complicate longer-term forecasting.

Street also noted a sharp increase in district health-insurance costs and said the administration would discuss moving from fully insured to self-insured models to manage future risk. He told the board that the district would be conservative in its projections, advertise appropriations high as required by the state, and intentionally limit operations-fund capital spending to preserve day-to-day services.

No formal budget adoption occurred at the hearing; the district staff said the board would reconvene for adoption in October and continue to refine projections with policy-analytics partners. The presentation included opportunities for public questions; no public comment altered the staff’s budget proposals during the hearing.