McCreary County Board weighs higher 2025–26 tax rate as federal payments, rising costs shrink budget

At a regular meeting Aug. 26, the McCreary County Board of Education discussed three options for the 2025–26 property tax rate and heard staff describe a sharp drop in federal in-lieu payments that contributed to an operating shortfall.

District staff presented three rate options: the current rate (reported as 0.00350, projected to generate about $1.9 million), option 2 (0.00355, projected about $1.93 million) and option 3 (0.00358, slightly higher projected revenue). The presentation said the district’s Secure Rural Schools (in-lieu) payments this year are $14,451, down from prior years when the district received roughly $200,000–$220,000, and about $100,000 last year. That reduction, together with increases in insurance premiums and utility costs, was described as producing a multi-hundred-thousand-dollar budget gap for fiscal 2026.

Board members discussed the trade-offs between keeping the rate at its current level and adopting a higher rate to close the projected gap. One board member moved to adopt option 3 as the district’s tax rate; the transcript records the motion but does not record a roll-call or final vote.

Board discussion also addressed the district’s relative position compared with neighboring districts if multiple districts adopt similar increases, and whether raising the rate would keep the district competitive for services and staffing. A separate motion to set the personal property tax at option 2 was made later in the meeting; that motion likewise appears in the record but no final vote was recorded in the provided transcript.

Why this matters: the drop in Secure Rural Schools funding and rising operating costs were presented as the primary fiscal drivers for the proposed rate increases. Staff said the combined effects of lower federal in-lieu revenue and higher premiums could mean a shortfall the district must address in next year’s budget.

The transcript does not record final vote tallies or identify which board members seconded the motions; minutes or audio beyond the provided transcript will be required to confirm final outcomes.

Details available from the meeting record: the board considered adopting option 3 for the general tax rate and option 2 for personal property, staff reported Secure Rural Schools payments of $14,451 for the coming year, and staff reported an increase in insurance premiums and in utility costs (numbers provided during discussion).