CFO outlines tight budget outlook: district reliant on state funding and fund-balance policy debated

At the May 5 School District 5 meeting, Chief Financial Officer Tina Tucker presented the first reading of the fiscal year 2025-26 general fund budget and a detailed explanation of fund-balance considerations, reassessment effects and millage options.

Tucker told the board that roughly 64% of the district's operating fund comes from the state and warned that changes in the state's funding formula and reduced statewide allocations for "state aid to classrooms" will reduce the district's new-state-money projection this year. "If our district relies on 64% of its funding coming from the state, changes in that state formula will impact us greatly," Tucker said.

Nut graf: With state funding highly material to operations and the state's additional classroom allocation falling from earlier years, Tucker said the district faces constrained choices between proposed teacher and staff pay increases and local revenue options tied to millage decisions.

Tucker outlined two salary options to respond to the state's change in the teacher salary schedule (collapse of a "bachelor +18" lane): Option 1 would shift the district salary schedule and add $1,500 per cell across lanes (estimated $9.0 million total personnel cost increase). Option 2 would shift the lane and add $1,000 per cell (about $7.8 million increase). She also described a 2% support-staff increase proposal and identified potential operational savings including reclassifying temporary ESSER-funded positions (an estimated $1.2 million in savings if removed).

Tucker also reviewed local-revenue scenarios tied to reassessments in Lexington and Richland counties and explained three millage options: a true rollback to collect the same local tax dollars as last year (no new revenue), rollback plus allowable CPI/population growth (estimated additional $4.2 million), or maintaining the current millage (requiring use of look-back mills) to generate an estimated additional $7.9 million or, at the highest allowable look-back, up to $18 million.

Board debate focused on reserve policy changes and transparency. Trustee Huddle proposed an amendment to change the board's reserve-policy language and to add a requirement that the board study and vote on any excess year-end fund balance exceeding 25%; the amendment failed on a 4-2 vote. The original motion to approve proposed revisions to policy DFAB (reserve funds) then passed 4-2. Public commenter Kim Murphy had urged the board earlier to post enrollment reports and to withhold an increase in the district's operating reserve until the board provided more detail showing need.

Ending: Tucker said much of the budget remains uncertain because statewide allocations, county reassessment collections and federal funding changes could change revenue projections; the board set the next budget readings for May 19 (second reading) and June 9 (final reading).