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Board hears budget preview that raises special-education funding shortfall
Summary
Finance director Andy Hutchinson told the board the district proposes a 58.682 mill levy and will need to increase local transfers into special education from $3.2 million to $4.6 million to cover state-aid shortfalls; board members warned the mandatory transfers are constraining local flexibility.
The Manhattan-Ogden USD 383 board heard a detailed budget preview from finance director Andy Hutchinson that included a recommended mill levy of 58.682 — about 0.5 mills lower than the prior certified rate — and a projected overall budget increase of roughly 4.36% from fiscal year 2026.
Hutchinson told the board the district is facing lower federal aid (including the end of ESSER dollars) and modest state-aid changes, and that required local option budget (LOB) transfers into designated funds are a major driver of spending decisions. “Our requirement for the current year based on our weightings and enrollment is $3,200,000 to transfer from local option into the special education fund,” Hutchinson said, adding the district plans to increase that figure to $4.6 million this year — a $1,425,000 subsidy — to address shortfalls created by reduced state support.
Board members pressed on the sustainability of those transfers and the limits they place on local choices. Lou (board member) said mandated transfers have eroded flexibility and warned the district could face budget strain if the state formula remains underfunded. “If we get to the point where we don't have the money to transfer to cover that, then we have a budget violation, which is illegal,” Lou said.
Hutchinson walked the board through unencumbered cash balances, per-pupil calculations, capital outlay considerations and how transfers and fund codes appear in the budget software. He recommended the board authorize public hearings in September to finalize the FY27 budget. The board did not take final action on the budget at the meeting; Hutchinson said formal adoption is planned after the required public hearings and notice publications.
