Central SD 13J budget committee hears that enrollment decline and PERS costs squeeze next year’s general fund

The budget committee for Central SD 13J reviewed a proposed FY2026–27 general fund budget focused on preserving core instruction while confronting shrinking enrollment and rising fixed costs. Chair (S1) called the meeting to order and the presenter (S4) walked committee members through revenue, expense and contingency projections.

The presenter told the committee the district received a summer school grant worth $934,000 per year for the next three summers, which staff said provides more stability than past year-to-year awards. The presenter also reported enrollment was 2,869 students as of May 15, down 12 from three weeks earlier, and said that decline is a key driver of staffing and budget choices.

"We have been in a hiring freeze since January," the presenter said, describing a mix of layoffs (including staff paid from federal Title funds), unfilled positions through attrition and selective reposting for critical roles. The presenter later summarized staffing as a dominant budget item: "over 80% of our budget goes to staff," with teacher salaries forming a majority of teacher-specific salary totals.

The committee heard that federal Title funds (Title I, II, III and IDEA) remain flat, constraining options for supplemental programming and professional learning. The presenter explained how special-education funding works under current state rules: the district must cover roughly the first $30,000 of a high-cost special-education student’s expense and receives reimbursement only for costs above that threshold at a cents-on-the-dollar rate; staff said the district is pressing legislators for better reimbursement rates.

Pension costs emerged as another major pressure. The presenter outlined three components of the district’s PERS costs — employer retirement rates tied to tiers, the district picking up a 6% employee contribution for most staff, and a PERS obligation bond that historically offset those rates. Staff told the committee the PERS obligation bond matures around 2028 and warned that when that offset ends, districts statewide could face substantially higher PERS charges.

"That PERS bond will mature," the presenter said, noting the district has used the bond as an insurance policy against rate increases but that the bond’s end could lead to much higher annual pension costs unless other solutions are found.

Committee members pressed for detail on payroll breakdowns and how much of per-student funding goes to teacher versus classified pay. The presenter pointed to the expense pages in the packet, saying the total dollars for teacher salary and classified pay appear there and can be used to compute percentages, but staff did not present a pre-calculated percentage in the meeting.

Other expense pressures noted by staff included higher workers’ compensation and unemployment costs, rising liability insurance premiums driven in part by more abuse/misconduct claims statewide, and an increase in the costs the district pays for some contracted tuition programs (for example, specialized placements such as vocational day-treatment or programs for students who are deaf or hard of hearing). The district also budgeted for school resource officer staffing (about 1.5 FTE) and expects to transfer money to subsidize food service (staff projected about $300,000) because meal program revenue and rising food/labor costs have created a gap.

On revenue, staff said the state school fund remains the largest single source, allocated using a two-year enrollment comparison and weighted for special populations. Presenter (S4) summarized the district’s operating-revenue projection as modest growth (about 0.86% in the operating revenue line in the packet) and cautioned that grant indirects and estimate adjustments can change totals before adoption.

The committee approved the previous meeting minutes by voice vote early in the session and then set next steps: a full budget committee meeting on June 1 for deeper review of expenses and a public hearing and board adoption scheduled for June 22. The presenter told members that some figures could shift slightly over the next six weeks and that staff will return with grant details and additional answers to Q&A items.

The budget committee recessed at the close of the presentation; no formal policy action beyond approving the minutes occurred during this meeting.