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Hudson finance director warns possible $1M special-education shortfall if state cuts reimbursement
Summary
Finance staff told the board the district budget is at risk if state special-education reimbursement falls from an expected 42% to about 35%, creating an estimated $1 million shortfall this fiscal year and compounding pressures in subsequent years.
Bonnie, the district’s finance lead, told the Hudson School Board that a proposed change in state special-education reimbursements threatens the district’s fund balance and long-term projections. "If it doesn't, we will have a deficit of about $1,000,000," she said, referring to the possibility that the state may fund special education at roughly 35% instead of the 42% the district had modeled.
In the monthly budget update Bonnie said the district budget includes about $15,000,000 earmarked for construction projects in Fund 10 and that approximately $11,900,000 has been spent to date; remaining fund-balance resources had been relied on to cover referendum-related work. She warned that reduced special-education reimbursements could reduce the projected year-end fund balance from roughly $1.3 million to about $300,000 this fiscal year and may require updated five-year projections and possible follow-up budget adjustments.
Board members asked for clarifying projections. Bonnie and other staff agreed to provide updated multi-year projections showing the compounding effect if reimbursements remain below prior assumptions; the board also requested staff highlight the specific line items and fund impacts as numbers become clearer.
The board also discussed near-term operating variances driven by timing and WUFAR-accounting adjustments, snow removal costs from recent storms and lower heating costs year-to-date. Staff said they will continue monitoring and will bring reconciliations and updated projections to the board in the coming months.
