Carson City school board hears FY2026 budget assumptions, staff warns of a $4.9 million shortfall

Carson City School District staff presented preliminary budget assumptions for fiscal year 2026 on Feb. 25, telling the Board of Trustees the district currently projects a $4.9 million deficit if current assumptions hold.

The presentation, given by staff, described a preliminary revenue estimate of about $80.8 million against projected expenditures of about $85.7 million. The district plans for 6,884 students next year, down from budgeted 7,001 students this year, and an adjusted base per-pupil allocation of about $10,117 — roughly $3 more per pupil than FY25, staff said.

The shortfall reflects several factors cited by staff: a projected 3.25 percentage-point increase in employer PERS costs that would raise district costs about $1.8 million; a planning assumption that health insurance costs could rise 10 percent (about $485,000); step increases for eligible employees (about $860,000); and the district’s estimate that each 1 percent of a districtwide salary adjustment would cost roughly $811,000.

Why it matters: the district’s ending fund balance would remain above the state-required minimum under the current projection but would fall from about $17.3 million at the end of FY24 to an estimated $12.4 million if the full $4.9 million shortfall materializes. Trustees and staff framed the numbers as a starting point to guide planning before final state revenue figures are set.

"A couple new Board members, kind of what this is is just kind of a first little bit of information of how the budget landscape is starting to shape up," staff presenter Spencer Windward said during the presentation, warning that many figures are still assumptions. Superintendent AJ Fielding added, "this is the starting point. And so this is not taking into account retirements and resignations, which are going to, that will put a dent in that number. It'll improve that number."

Board members pointed to several levers staff will use to narrow the gap before a final budget is adopted: reviewing staffing vacancies and retirements, examining positions currently funded by grants that might transition to the general fund, and monitoring legislative activity through the remainder of the session. Trustees also asked for further briefings on grants and for additional one-on-one or small-group budget walkthroughs so newer trustees could better understand the mechanics.

Staff noted several legislative uncertainties that could alter the revenue picture: final K–12 funding allocations from the governor’s budget presentation, the possibility of moving SB 231 designated funds for staff salary increases into the general fund (which staff said would change accounting but not the total money available), and potential state actions related to mental-health funding tied to a Department of Justice settlement. The district also said federal and local funding levels were expected to remain similar to FY25 in current assumptions.

Next steps: staff will present a tentative budget to the board in late March, submit the tentative budget to state taxation by April 15, and present a final budget to the board for approval after the legislature concludes. Staff said the district can amend the budget within 30 days after the end of legislative session if necessary. Trustees requested further grant-detail briefings and follow-up work to try to reduce the projected deficit without cutting services.

Provenance: topicintro: "a couple new Board members, kind of what this is is just kind of a first little bit of information of how the budget landscape is starting to shape up." (transcript block starting at 2108.31). topfinish: "I don't know that I would be able to approve a budget with a deficit this large." (transcript block starting at 3743.60).