Hickman County Board adopts FY2026 budget despite projected $2.9 million shortfall

The Hickman County Board of Education on May 5 approved the district'9s fiscal year 2026 budget after district leaders described a multi-million-dollar projected shortfall and urged local steps to stabilize revenues.

Director of Schools John Mullins and district finance staff presented the budget package and a projection the district will spend about $2,906,338 more than it will receive in revenues in the coming year. Mullins told the board the district is "entering this school year with $8,729,492," and projected an ending fund balance of $5,823,154 on June 30, 2026 if the budget proceeds as presented.

Mullins and district finance staff attributed the shortfall to several causes: state-mandated pay increases for teachers, an ongoing enrollment decline that the district estimates cost roughly $350,000 this year, a projected reduction of 6 cents of property tax support (about $320,000), and the loss of federal ESSER funds (about $500,000). Mullins said, "The state has mandated pay increases," and that the district cannot raise starting teachers without raising other staff, which added to costs.

District staff outlined the proposed compensation changes included in the budget: a 4.5% pay raise for employees earning more than $33,000, a $1,500 flat raise for full-time support employees (which staff said is larger than a 4.5% raise for many), and an increase in daily substitute pay from $75 to $90 to improve substitute availability. In a separate presentation, finance staff provided the budget tables that list revenues of $33,100,067 and expenditures of $39,270,696 for the budget as presented, and a projected deficit of $2,906,338 in the district'9s mid-year estimate.

Administrators told the board they are weighing a mix of short- and longer-term responses. Proposed solutions include stabilizing and growing enrollment, promoting local sales-tax-generating purchases, absorbing positions where possible when employees leave, targeting capital projects and equipment replacement, and pursuing grants and county funding for major capital needs. Board and staff also discussed the potential for county-level bonds to cover large capital items such as roofs or buses; a board member reported a county commissioner told staff the commission might consider financing school capital projects with bonds.

Mullins warned of the consequences if revenues do not improve: "We'9re going to have to make draconian personnel cuts, and we'9re going to have to make program closures," he said, adding that the district is spending a substantial share of its reserves in the proposed budget and could face insolvency in three years if the trends continue.

Board members pressed staff about specifics including bus replacement timing, HVAC and roof maintenance, and whether additional federal or state grant opportunities exist for buses and capital projects. Staff confirmed a grant program for propane buses is again open and noted the district previously acquired multiple propane buses under a buy-one-get-one-type incentive.

After discussion the board voted to adopt the FY2026 budget as presented. The motion carried on a recorded vote; one board member voted no and the remainder voted to approve the budget.

The administration said it will present the adopted budget to the county legislative body later this week and continue seeking local and grant sources for capital needs.