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Superintendent warns state education finance proposals could cut district revenue
Summary
Superintendent Miss Selhurst told the board that current senate and proposed bills remove inflation adjustments and propose cuts that could reduce the district's compensatory and literacy aid, creating an estimated combined revenue loss of roughly $100,000 for next year and complicating budget planning.
Superintendent Miss Selhurst told the Stewartville Public School District board that pending state education finance proposals in the legislature could reduce district revenues and complicate budget planning for next year.
Selhurst said the Senate education finance bill (file 2255) removes the annual inflation adjustment for per-pupil formulas after fiscal 2027 and proposes a $687 million reduction to education funding in the following biennium. She said the bill sets the formula allowance at 2.74% for the coming year and 3% the following year, with no guaranteed increases afterward. "If they don't get that done by May 19, then they'll have to do a special session," she told the board, referring to timeline pressure on reconciliation.
She detailed anticipated impacts on district aid lines: a projected reduction of roughly $30,000 in compensatory revenue for next year compared with current law; a proposed literacy aid reduction of about $23,000; changes to special education cross-subsidy aid and a proposed reduction in special education transportation in the governor's proposal. She said unemployment insurance aid would be funded with a $100 million one-time appropriation for 2026–27 only and would likely be prorated across districts, meaning the district could still carry some employer UI costs in its general fund.
Selhurst warned the board that because the district already adopted budget recommendations, the unexpected $30,000 compensatory shortfall and other decreases could put the district "underwater" in next year's budget and that revised budget actions may be required later this summer after the legislature resolves differences.
She noted one positive item in the Senate file: allowing roof repairs to be paid from Long Term Facility Maintenance revenue without requiring a voter bond. Board members asked clarifying questions about timeline and whether the changes reflect spending shifts or lack of funding. Selhurst said both education and health and human services are seeing cuts in the proposals and emphasized uncertainty while the House bill remained unreleased at the time of the meeting.
Selhurst advised the board the statutory deadline to adopt the district budget is June 30 and that additional budget revisions may be necessary after the session concludes.
