DeWitt Public Schools adopts 2025-26 budget that leaves structural deficit of roughly $337,000

DeWitt Public Schools officials on Tuesday approved the district's 2025-26 budgets, adopting a plan that begins the year with a projected $1.7 million operating deficit but, after removing one-time items, leaves a structural deficit of approximately $337,000.

District officials said the shortfall stems mainly from the state-level changes to retirement funding and differences between revenue reductions and corresponding expenditure decreases. Assistant Superintendent Rob Spagnolo told the board the district's starting point was a 2024-25 board-approved deficit of $1,005,880 (as presented) and that the governor's proposed $3.92 foundation allowance increase would add roughly $1.02 million in revenue, but the elimination of a retirement cost-offset removed about $1.01 million from the budget, producing a net shortfall when combined with other cost increases.

The presentation to the board explained that while the governor proposed increases to some categoricals (at-risk, special education, mental health and school safety, and transportation), DeWitt does not expect increases in at-risk or special education categoricals at the district level for 2025-26. The district also noted a reduction in retirement expense projected at $546,000 under the governor's plan, which left an unresolved gap of roughly $400,000 between reduced revenue and reduced retirement-related expenditures.

Spagnolo reviewed other drivers in the budget, including a $172,000 projected increase in employee healthcare and operational increases for utilities, property-casualty insurance and substitute teachers. Staffing adjustments baked into the budget include nine retirements, resignations or reconfigurations: the high school assistant principal position retirement, a reconfigured technology director and communications coordinator roles, three teacher retirements with one position not replaced, four special education paraprofessional positions not being refilled, and the planned addition of a half-time special education teacher that district officials said will be converted to full time with one-time Intermediate School District (ISD) funding.

The district said it expects total revenues for 2025-26 of about $40.6 million versus total expenditures of about $42.3 million, producing the roughly $1.7 million deficit before one-time items are removed. The board presentation listed fund-balance projections: beginning fund balance projected near $7.98 million and an ending fund balance around $6.2 million, about 14.7% of expenditures. The district said about $1.2 million of assigned fund balance is expected to remain after year-end and that roughly $500,000 of assigned fund balance is planned for use in 2025-26 to maintain positions funded initially with federal dollars.

Spagnolo also summarized revenue shifts: state revenue projected to decline roughly $473,000 taking into account the foundation increase and retirement line items; federal revenue to decline by roughly $91,000 due to the exhaustion of ESSER funds that previously funded summer programs; and a small increase (about $7,000) in vocational-education revenue from the ISD that will be matched by VocEd tuition expenditures. The district noted an installment purchase and sale of buses that affected cash-flow accounting but had net-zero bottom-line impact when transfers were considered.

At the conclusion of the budget hearing, the board moved and adopted the 2025-26 budgets for the general fund, community education fund, food service fund and student activity funds as recommended by Assistant Superintendent Rob Spagnolo and Superintendent Kevin Rybidek.

The approved tax levy for 2025-26 remains at 18 mills for operating and 10 mills for debt, unchanged from recent years and referenced during the public hearing.

The board vote to adopt the budgets was recorded as "aye" by those present and the motion carried.