McCreary County schools weigh draft budget amid frozen federal grants and state funding shortfall

The McCreary County Board of Education heard on Jan. 28 that an apparent federal freeze on some grant awards and a reported Kentucky Department of Education (KDE) shortfall are prompting the district to plan conservatively for next year’s budget.

Superintendent Crawford told the board that the district received notice the same day that some federal grants, including the district’s Gear Up and augment reimbursements, were being frozen. “Trump has froze all federal grants, everything. So that includes our, GearUp and our augment money,” Crawford said during the finance discussion. He and staff said they immediately sought short-term funds to cover at least the next quarter while the freeze is being reviewed.

The warning came as Finance staff presented the district’s draft 2025–26 budget, which staff described as preliminary and conservative because several revenue items remain unknown. “This is a draft budget,” finance staff member Miss Delisle said. She and Treasurer Tiffany DeBauch urged the board to treat the draft as a planning tool rather than a finalized plan.

Why it matters: The district relies heavily on state and federal funding to balance its general fund. Finance staff said potential reductions to federal Title grants and a KDE seat-funding shortfall could affect staffing paid through those streams.

Details presented to the board - Staff reported guidance to plan for a potential 25% reduction in Title I funding, which the district estimated would reduce revenue by about $535,000. They also estimated a possible elimination of Title II funding at roughly $214,000, for an aggregate potential reduction of about $750,000. - Miss Delisle told the board KDE had reported a roughly $40 million shortfall in seat funding statewide; the district is awaiting further KDE guidance on how that will affect local allocations. - For planning purposes staff estimated recurring general fund revenue near $20,000,000, carry-forward or nonrecurring revenue about $2,600,000, and total general fund revenue roughly $22,700,000. Budgeted general fund expenses were presented at $22,122,000, which staff said would leave a contingency of approximately 2.68% under current assumptions. - To reflect possible inflationary and contractual costs, staff included step increases for eligible staff and updated non-salary expense estimates for utilities and insurance.

What district leaders said about risks and next steps Treasurer DeBauch described immediate work to secure cash to cover near-term needs if the federal freeze continues. “She did the leg work on that today and got that pushed through,” Crawford told the board, referring to a short-term funding arrangement staff obtained to cover at least the next quarter.

Miss Delisle said the draft will be refined as KDE and federal guidance becomes clearer. “We will start meeting with our principals and working on staffing applications for each school next month,” she said, noting the tentative budget in May and the working budget in September are the usual milestones for more precise numbers.

Board context and local implications Board members and staff emphasized that the draft is preliminary and that budgeting assumptions could change as state and federal decisions arrive. Staff repeatedly urged caution: “We have to budget for the worst,” Crawford told the board, while adding that actual outcomes often turn out less severe than the most conservative projections.

Next steps Finance staff will update the draft as KDE and federal agencies provide additional guidance. The board scheduled staffing and principal meetings next month as part of the budget-development process.