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District projects multi-year deficit; staff recommends net-zero budget target for 2026
Summary
Business services told the board that, based on current projections, expenditures are beginning to outpace revenues and recommended a net-zero-change budget for 2026; staff highlighted a planned FY25 operating deficit of about $8.7 million and warned of a funding cliff projected for FY2030.
Business services presented the district's long-range financial plan and 5-year forecasts at the Nov. 12 work session, walking the board through assumptions and major cost drivers. The presentation explained that expenditure growth assumptions are set at 3% and that, given the current trend, the district has "started deficit spending." The packet included a historical trend showing a planned operating deficit in the adopted FY25 budget of roughly $8.7 million.
"Based on the trend we're on coming into this fiscal year and forward, we've started deficit spending," a presenter said. Staff recommended that the FY26 budget be developed as a net-zero-change budget and flagged a projected funding cliff around FY2030 that will require earlier planning and mitigation. The briefing also included fund-by-fund projections, a benchmark-district comparison and known cost drivers (payroll tax for expanded FMLA coverage, an expiring transportation contract and estimated 3% expenditure growth). Board members asked for dollar details on cross-subsidies and staff pointed to a projected cross-subsidy change for special education in later years.
