Asheville City Schools staff warn of multimillion‑dollar shortfall; board discusses tax and budget options

Asheville City Schools finance staff told the school board on Thursday that the district may need to draw as much as $4 million from its fund balance this year and faces a larger funding gap that could total millions more next year.

The presentation by district staff laid out enrollment and staffing trends, changes in local supplemental revenue, and projected revenue risks tied to sales tax and county appropriations. Staff and board members discussed options ranging from restoring the Asheville City supplemental tax to asking Buncombe County to levy a school tax on the district’s behalf, and asked staff to prepare more detailed materials for upcoming county conversations.

Maggie (staff member, Asheville City Schools) framed the budget review by walking board members through three years of historical budget data, enrollment and staffing ratios and the district’s staffing allotment formula. Staff presented the district’s current funded average daily membership as about 3,824 students for next year and reviewed how the state now funds districts “in arrears,” meaning next year’s state allocation will be based on this year’s early counts.

Heidi (staff member, Asheville City Schools) said the district’s preliminary planning assumes several uncertain factors — notably sales tax and property tax revenue after recent storm damage — and that the district could “spend up to $4,000,000 this year” from fund balance to operate schools. She noted the district is continuing monthly monitoring with county officials and plans a more detailed budget presentation in April.

Staff presented figures and risks used in the draft planning: local supplemental pay that the district provides to employees could approach $6.2 million next year; supplemental sales tax proceeds that historically have helped cover that cost are currently projected at roughly $3.5 million; last year the district received about $4.5 million in that sales tax but paid about $5.2 million in local supplements, generating a shortfall. Heidi also told the board staff currently estimate a roughly $500,000 loss in state funding tied to a small decline in funded enrollment and about $718,000 in local funds reductions, with a possible broader shortfall scenario staff labeled as significant (slides discussed a scenario with a larger, multi‑million dollar gap).

Board members asked clarifying questions about the presentation format (purpose codes versus object codes), staffing formulas, how the district counts and is funded for students, and what parts of the central office and maintenance workload are fixed regardless of enrollment. Staff said the board will receive more detailed object‑code information when preliminary year‑end numbers are final.

The board’s discussion turned to local political and policy options for addressing the shortfall. Several board members said they support asking Buncombe County to provide clearer, itemized tax‑bill information and to consider changes that would make school funding more transparent to taxpayers. Board members discussed two distinct approaches: (1) restoring or increasing the Asheville City supplemental property tax (the board discussed restoring the previous 12¢ supplemental rate and noted the district’s 2¢ supplemental levy currently would raise roughly $1.5 million, per staff estimates); and (2) a longer‑term idea to ask Buncombe County to levy a school millage on the district’s behalf or to present the county’s tax bill with clearer line items showing how much of local taxes support schools.

Maggie and other staff warned that either path would involve legal and procedural review, and that county cooperation would be required. Board members asked staff to prepare materials showing how charter schools affect district ADM totals and funding flows and to develop a clear narrative and communications plan for any request to county commissioners.

Board members also asked staff to explore whether the district’s local supplement structure (currently percentage‑based and provided broadly) could be revised to be more budget‑manageable, for example by converting percentage supplements to flat or tiered flat amounts. Staff noted such changes would affect employees and asked for more analysis.

No formal budget votes were taken; the discussion was framed as information and direction for further work. Staff said the budget will return for additional work‑session discussion on March 3 and again at the board meeting on March 10, and that deadlines for county submission are looming (staff cited a May 1 message deadline and May 15 for official submission to Buncombe County, with county action by July 1).

Board members closed the meeting by asking staff to return with more detailed object‑code comparisons, clearer enrollment and funding tables, and a communications plan for any county or local tax requests.

The meeting ended by consensus at the close of the staff presentation.