Board reviews FY25-26 revisions and outlines FY26-27 budget with $27M projected deficit noted

The Fair School Board accepted Revision No. 3 to the FY25-26 general fund budget and reviewed a proposed FY26-27 budget that projects a roughly $27 million deficit for the current year while outlining revenue and spending assumptions for the next fiscal year.

District finance staff presented Revision #3, which reflected a roughly $1.5 million increase in interest income, reductions in indirect costs tied to expiring ESSER funds, and a series of increased expenditures already incurred in maintenance, transportation, and contracted therapy services. The presenter said the revision corrects an omitted transportation encumbrance for bus purchases and adds approximately $1 million for a multi-year laptop refresh plan. The presentation concluded with a projected FY25-26 deficit of about $27 million and an unassigned fund balance of roughly $38 million (about 9.13 percent of projected revenues).

Board members asked whether occupational and physical therapy costs would be reimbursed via Medicaid for eligible students; the presenter indicated that those services support Medicaid-eligible students and reimbursement was likely. Members pressed on school-food spending after federal program changes; staff confirmed the district temporarily absorbed free lunches using an internal fund balance. Members also discussed recurring large maintenance expenses linked to hurricane repairs and long-standing under-budgeting for facility repairs.

On the FY26-27 proposal, staff presented a baseline of $411 million in revenues and other sources — about $12 million less than the prior provision — noting a modest property tax decrease (~$389,000), a conservative sales-tax baseline reduction ($619,000), and a state MFP increase of about $837,000. The budget currently excludes updated salary-schedule costs pending final schedule decisions; the presenter said insurance premiums are expected to increase about $1.5 million (roughly a 6.83 percent premium rise).

The board discussed forecasting methods; several members urged consistency in realistic estimations for both revenues and expenses, noting strong year-to-date sales-tax collections. A member requested an analysis of end-of-year spending patterns to identify whether departments overspend near fiscal year-end to avoid future cuts; the motion to produce that report did not receive a second at that time.

The board approved the FY25-26 revision and proceeded to act on the proposed FY26-27 budgets during the meeting. Staff said final salary schedule changes will be presented later in the summer when databases are updated.