Pulaski County schools favor a 3% raise to unlock state pay supplement as insurance costs surge

Pulaski County Public Schools budget staff recommended the board prioritize a 3% across‑the‑board raise to capture the state’s compensation supplement, saying the increase would cost the division about $1,300,000.

Ms. Galar, who presented the state revenue forecast, told the board the governor’s December budget remains the only firm baseline; the House and Senate have sent amendments to their floors but the district must budget conservatively until reconciled. "A 3% raise should cost us about $1,300,000," Ms. Galar said, and staff argued that reaching that threshold is necessary to access the state supplement this year.

Why it matters: the district faces two competing pressures. Federal grant revenue has fallen sharply — staff said federal funds totaled around $11,000,000 in 2024 and are roughly $4,000,000 in the current budget — reducing a prior source of flexibility. At the same time, health‑insurance claims and reinsurance costs are rising: staff presented monthly claims ranging from roughly $600,000–$800,000 and cited one month of about $1,500,000; they said underwriter guidance shows possible premium increases in the 15–30% range and reinsurance costs up about 50%.

Board members discussed options for offsetting higher insurance costs, including splitting premium increases with employees, implementing spousal‑exclusion (removing coverage for spouses who have access to other employer plans), and prioritizing raises to support recruitment and retention. Staff described the tradeoff: if the division does not offer the 3% raise, it could lose the state compensation supplement tied to that threshold; if it does offer the raise, rising insurance costs may still reduce take‑home pay unless the division absorbs a larger share of premium increases.

Staff recommended front‑loading the 3% raise in the budget so the district can secure state funds and then use available carryover dollars to cover immediate needs if federal payments slow. The recommendation included monitoring the state budget as the House and Senate reconcile differences and running RFPs for insurance to test the market.

Next steps: staff said they will watch the state budget reconciliations and return with updated numbers at the next regular school board meeting and the following budget session. The board also has a scheduled meeting with county officials the next day to coordinate local support for compensation levels.