Tentative FY27 budget preview: $697.3M revenue forecast, $6.8M reduction menu and tax‑digest uncertainty

District finance staff and external consultants presented a tentative FY27 budget preview to the Savannah‑Chatham County Board of Education during an informational session on June 3, 2026 and warned that the absence of a finalized county tax digest could materially change the revenue picture before formal adoption.

Mike Potter, managing director with Alvarez & Marsal Public Sector Services, told the board the digest had not been delivered to the district, limiting the administration's ability to set a precise millage rate and finalize property‑tax revenue assumptions. "We want to be really realistic about the fact that we've proposed a budget that balances today, but that we could end up with more revenue or less revenue that would require us to make adjustments as the month goes on," he said.

Staff presented updated state QBE allocations and local adjustments that together reduced projected revenue relative to earlier models. A finance presenter said the revised revenue forecast stood at approximately $697.3 million after accounting for a roughly 2% downward QBE adjustment, enrollment declines and expirations of some state grants.

On the expenditure side, staff described several updates that increased projected costs, including the end of an MSAP grant (requiring reallocation of services to the general fund), refined COLA calculations and an updated vacancy factor. Those changes left a projected gap that staff proposed closing with roughly $6.8 million in reductions ranked for restoration if additional revenue arrives.

The prioritized reduction menu included a potential cut in the COLA from 3% to 2% (estimated savings of about $4.2 million), delaying a public data dashboard ($250,000), reducing a communications strategy ($500,000), pausing AI readiness staff training ($50,000), phasing in transformation paraprofessionals (approximately $350,000), and trimming legal services and emergency weather budget lines, among others.

Board members asked how reductions would affect strategic priorities and whether reduced investments would undercut plan execution. Staff said they tried to prioritize baseline and safety needs first and rank strategic investments for restoration in order of community and board priorities. Dr. Watts cautioned that new baseline obligations have emerged daily and the reductions list might expand while the district awaits digest numbers.

Board members also sought legal and procedural guidance about the June 30 adoption deadline and options if the digest arrives late; staff said the district is reviewing legal options and could consider a short continuing resolution style approach while preserving board oversight, but they did not present a final legal recommendation at the session.

On fund balance, staff reported approximately $63 million designated for projects (largely renovations transferred to a project budget), $23.1 million of current‑year uses and an estimated remaining fund balance of about $172.1 million—comfortably above the board's policy minimum but below a possible statutory cap tied to the fiscal year budget. Presenters recommended attention to capital planning, grant management and long‑range financial modeling to smooth future cycles.

What's next: staff will continue to refine revenue estimates when the tax digest arrives, present updates to the board and may bring back budget adjustments or options for the board to consider before formal adoption.