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Lexington 04 advances 2026–27 general fund budget on first reading, staff recommends no millage increase
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Summary
Staff recommended — and the board advanced on first reading — a balanced 2026–27 Lexington 04 general fund budget built around a no‑millage increase (Option 1). The plan prioritizes a $2,000 teacher pay increase where possible, step increases required by law, and maintaining a multi‑month fund balance.
Lexington 04 board members advanced the district’s proposed 2026–27 general fund budget on first reading after a staff presentation that recommended no increase in millage.
Sean (presenter) told the board the recommended budget follows board policies BDD and DB and aims to balance instructional and operational needs with long‑term fiscal sustainability. He said roughly 72% of the district’s general‑fund revenue now comes from state sources and about 26% from local taxes, making the district more sensitive to state revenue shifts and sales‑tax volatility.
The presentation laid out three revenue options for the board: Option 1, a no‑millage increase that staff estimated would yield roughly $912,000 in additional general‑fund revenue; Option 2, an 8.4‑mill increase (the CPI + growth cap allowed by recent legislation) that would add about $284,000 more locally (bringing additional revenue near $1.1 million); and Option 3, capturing up to three years of unused millage (up to 38 mills), which staff estimated would add about $1.288 million above Option 1 (totaling just over $2.2 million).
"To our recommendation, based on all these things, we basically would recommend Option 1 for revenue purposes," Sean said, arguing the district could adopt a balanced budget and preserve fund balance without raising mills.
Staff emphasized spending priorities under the recommended budget. Sean said roughly 87% of the general fund is dedicated to salaries, fringe and contract staffing costs, and proposed maintaining existing services while prioritizing retention and recruitment of highly qualified teachers and staff. He recommended maintaining a healthy fund balance of about four months of operating expenses to help manage cash‑flow variability and protect bond ratings.
On mandated items, staff noted the district must provide the teacher experience step increase; they estimated that requirement would cost approximately $188,000. In addition, staff recommended (but said was not statutorily required) raising the teacher salary schedule by $2,000 — an option they estimated would cost about $662,000 locally — and a 2% increase to the support‑staff salary schedule.
Dr. Nutter (speaker 4) supported the no‑millage recommendation, saying recent fiscal practices and strategic realignment of positions allowed the district to remain competitive for staff "without raising taxes." The board also discussed comparative per‑pupil and per‑mill metrics versus neighboring Lexington districts to explain why a mill generates less revenue in Lexington 04 than in some districts with larger non‑owner‑occupied tax bases.
After discussion and questions from board members, the Chair moved to accept the 2026–27 general fund budget on first reading; the motion was seconded and the board carried the first reading vote.
The budget will return for subsequent readings as required by the district’s adoption schedule; staff also told the board they will monitor uncertain items (utility costs, potential tax‑exemption changes and federal funding shifts) and recommended amending the budget midyear if needed rather than budgeting larger contingencies now.
