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Superintendent warns state stipend changes and MFP withholding could force cuts, delay pay
Summary
Superintendent Jeff McNeely told the board the governor's directive changes stipend eligibility and the state's method will withhold roughly 5% of monthly MFP payments into an "over‑collection" fund, delaying stipend payments; the district will consider freezes, administrative reductions and paused capital projects.
Superintendent Jeff McNeely briefed the Tangipahoa Parish School Board on a potential cost‑stabilization plan after changes in state stipend policy and a state withholding process that will delay payments to districts.
McNeely said the state's approach narrows $2,000 eligibility to only "frontline" classroom teachers while most other certificated staff who received stipends previously would receive nothing. He said the state plans to withhold 5% of monthly MFP disbursements into an over‑collection fund; the state will release those funds when a statewide accumulation target is reached, a process the superintendent said could delay district stipend payments until May or June.
"If we were to use fund balance money to do this, we would fall to 6.3 percent," McNeely warned, noting the district's undesignated fund balance was 8.63% of annual expenditures and that dipping below the state's recommended threshold risks a declaration of financial distress.
McNeely outlined options the administration is modeling for the FY2026‑27 budget: temporarily freezing the annual step increase (estimated ~$2 million savings), pausing nonessential purchases and capital projects (except federally required desegregation or safety work), reducing administrative operating budgets by 5%, maximizing current personnel before hiring new positions, and targeted strategic hiring freezes. He also said local raises or stipends given in the current year may be credited against the state stipend calculation, potentially reducing the state payment.
Board members asked for timelines and public messaging. The superintendent said the district aims to present a draft budget in July, take items to finance on Aug. 4 and adopt a final budget by Sept. 1–15 to meet statutory deadlines. Members voiced concern about the impact on lower‑paid hourly staff if step increases are paused and about the sustainability of using fund balance for recurring expenses.
McNeely also discussed other cost pressures, such as rising retiree OPEB costs and changes to FEMA disaster reimbursement that increase district exposure for storm costs.
The presentation was informational; the board did not take an immediate budget vote at the meeting but directed staff to continue refining options for adoption this summer.
Provenance: Superintendent presentation and Q&A, SEG 1932 onward.
