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Citizens Financial Advisory Committee warns of projected FY26 deficit; urges keeping unassigned fund at 10%
Summary
The district’s volunteer Citizens Financial Advisory Committee told the board the district faces a projected general‑fund shortfall in fiscal 2026 if adjustments are not made and recommended preserving an unassigned fund balance at or above 10%. The board accepted the CFAC report.
The Hopkins Citizens Financial Advisory Committee (CFAC) presented budget findings and recommendations to the school board on Feb. 11, warning that the district is likely to face a general‑fund deficit in fiscal year 2026 unless program or service efficiencies are identified.
CFAC members said the district’s financial position remains relatively strong but stressed that most revenue — about two‑thirds — comes from state sources and that projected increases in state funding are minimal. The committee recommended preserving the district’s unassigned general‑fund balance at or above 10% of expenditures and advised against using that balance to cover recurring shortfalls.
Why it matters: CFAC said sustained use of one‑time fund balance to cover structural shortfalls would exhaust reserves and increase fiscal risk, potentially affecting bond ratings and the district’s ability to respond to unforeseen costs.
Key assumptions and findings: CFAC listed budget assumptions that informed its analysis, including a 2% per‑pupil increase in state funding, flat enrollment, a 4% annual salary increase and a 3% increase in purchased services. The committee said the general fund unassigned balance is projected to fall from 14% in fiscal 2024 to approximately 10% in fiscal 2025 and that FY26 could run a deficit absent adjustments.
Recommendations and next steps: CFAC urged the district to pursue enrollment growth and retention strategies, invest in marketing and virtual education where appropriate, and continue legislative advocacy for stable funding. The committee also said the district should look for efficiencies and explore options beyond relying on the unassigned fund balance.
Board action: The board voted to accept the CFAC report. The motion passed on voice vote and was recorded as accepted by the board; the report was entered into the record with no opposing votes recorded.
Ending: CFAC members told the board they will continue to meet and to provide analysis and options as the district develops its FY26 budget.
