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District says some federal grants are delayed; miscellaneous pay to be taxed at 22% flat rate
Summary
Danville Public Schools reported temporary delays in several federal grant allocations while core federal funding remains unaffected, and the district will tax miscellaneous pay at a 22% flat federal rate starting July 1 to meet IRS guidance.
Miss Gillis reported a federal grant status update to the board, and a finance presenter explained a change to miscellaneous pay withholding.
Why it matters: delayed grant allocations may affect professional development and English learner services; the new withholding method changes how employees will receive and be taxed on extra pay.
Miss Gillis said several grants for the 2025–26 school year are under review and temporarily delayed, though core federal education funding is not affected. “Core federal federal education funding is not affected by these delays,” she said, and named programs that will continue as scheduled: IDEA special education funding, Title I, Perkins for career and technical education, Title IV Part B and Title V for rural schools. For grants under review the district cited approximate prior allocations: Title II Part A approximately $525,000; Title III Part A about $27,000 (English learners); Title IV Part A $339,144; and Adult Basic Literacy $79,611.25. Miss Gillis said the district is monitoring agencies and will provide updates as allocations are finalized.
On payroll, the finance presenter described the district’s current practice of issuing miscellaneous pay (extra duty, overtime, stipends, after‑school tutoring and summer school) as a separate mid‑month check for monthly employees and explained two IRS approaches for taxing supplemental pay. The district said most employees previously preferred a separate check taxed at a flat rate, and beginning July 1 the district will implement a 22% flat federal tax withholding on miscellaneous pay. The presenter said, “we will pull this 22% flat tax rate on all miscellaneous pay.” FICA and state withholdings will continue to apply; weekly paid employees (bus drivers, cafeteria staff, custodians, maintenance workers) were described as unaffected because extras are included in their regular weekly pay.
Board members asked clarifying questions about which employee groups are paid weekly and why the mid‑month payment existed; the presenter explained the timing and processing constraints and noted employees can reconcile withholdings when they file taxes.
No board vote was taken on the grant status; the payroll change was presented and the board requested a work session for further review.
