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St. Joseph board accepts FY27 preliminary budget after hearing $3.6 million projected operating shortfall
Summary
Board members accepted a redesigned FY27 preliminary budget showing a projected $3.6 million operating deficit and agreed to further study demographic and staffing options; the board also approved an FY26 amendment to actuals to avoid a late fiscal-year amendment.
The St. Joseph School District Board of Education voted unanimously to accept the district's FY27 preliminary budget after a detailed presentation showing a projected $3.6 million operating deficit for the coming fiscal year.
Finance staff presented a redesigned, transparency-focused budget that ties spending to the district's strategic plan and "portrait of a graduate." Katie (finance presenter) told the board, "that 3.6 million is what we anticipate for FY27," and explained the estimate reflects lower-than-expected state revenue and a steady local tax levy proposed at $4.91 per $100 of assessed valuation.
Why it matters: salaries and benefits make up the majority of operating costs (about 75% of funds 1 and 2), and the shortfall means leaders will have to evaluate staffing, central-office roles and program priorities. Katie and other presenters recommended a new demographic study and continued right-sizing of staff based on enrollment trends.
Details and context: presenters said local revenue will account for roughly 54.6% of total revenue and that assessed valuation is projected at about $1.37 billion. State funding per student was below anticipated levels this year, reducing revenue projections. Presenters also explained routine annual transfers from Fund 1 to Fund 2 (to cover certified salaries/benefits) and noted projected operating fund balances: an estimated $13.2 million in Fund 1 and a projected operating fund balance percentage of roughly 8.35% by the end of FY27 under current assumptions.
Board reaction: members pressed staff on options to close the gap and urged continued central-office efficiencies. Several members advocated an advocacy resolution to state lawmakers about perceived underfunding in the state's school funding formula and asked staff to circulate a draft for review. Dr. Hedgecorth described current-year expectations as improved, saying the district now projects a roughly $1.1 million surplus for the closing fiscal year — a carry-forward that modestly improves reserves.
What happens next: the board approved the preliminary FY27 budget 6-0 and asked staff to return with more refined numbers (October budget amendment) once assessed valuation, enrollment and state action are finalized. Separately, the board also voted 6-0 to amend FY26 budgeted revenues, expenditures and transfers to actuals, allowing administration to finalize fiscal-year numbers without a late August amendment.
The board plans additional discussion in upcoming work sessions and asked staff to produce a demographic study and more granular program-level analyses to identify options for closing the FY27 gap.
