Committee hears FY27 budget primer; members press on revolving funds and hold-harmless risk

Franklin School Committee members reviewed a primer on FY27 budgeting and probed district leaders about constrained revenue sources and reliance on revolving funds.

Budget presenter "Miss Valani" told the committee the FY26 budget closed at $78,300,000 and that the district began FY27 with approximately a $2.1 million level-service shortfall. "The foundation of our FY27 budget is a level service baseline," she said, adding that major cost drivers include a projected 14% increase in health insurance and rising special-education tuition and transportation costs.

Valani said the district relied heavily on revolving funds to close a FY26 gap but is proposing a 27.9% decrease in revolving-fund usage for FY27 to protect long-term structural stability. "With the FY26 usage already, we are projecting $3,400,000 in usage for FY26," she said. She warned that continued depletion of restricted revolving accounts would require using the general operating budget to cover program costs in future years.

Committee members pressed for specifics about how revolving funds may be used and the consequences of depletion. Valani explained that revolving accounts are legally restricted to the programs that generate them (for example, athletics or transportation) and cannot be transferred to the general fund. She said transportation costs for FY26 were roughly a $1,860,000 contract and that the district relied on about $1,000,000 from the general fund and $800,000 from the transportation revolving fund in FY26.

Members also discussed the state’s review of Chapter 70 aid and the district’s hold-harmless status. Valani said Franklin is among the highest beneficiaries of hold-harmless adjustments and noted the district could be adversely affected if that provision were phased out. "If we are talking $14,900,000 in excess aid that we receive," she said, "that would be hugely impactful." The committee unanimously moved to endorse a letter urging careful consideration of any formula changes and asking the state for a thoughtful, phased approach.

Administrators reminded residents to participate: the superintendent-recommended budget is scheduled for Jan. 27, a public hearing will be held Feb. 10, and the committee is scheduled to vote on the final proposal Feb. 24. No formal budget votes were taken at the meeting; the primer was described as an early-stage overview to frame upcoming deliberations.

The committee asked administration to return with a more detailed presentation, including versions of the budget with and without health insurance costs separated out, and to provide visuals and data during the January budget work sessions.