Expecting a combined $1 million shortfall in the district’s budget for the 2025-26 and 2026-27 school years, Gasconade County R-2 officials met on May 6 to discuss the grim financial future of public education.

Assistant Superintendent Dr. Staci Johnson led the discussion, saying they will need to look at cutting roughly $700,000 from the future budget.

“This is the current estimate from the Capitol, and from DESE (Department of Elementary and Secondary Education), in terms of the next two years, the amount that public education is going to be underfunded in the state of Missouri is $345.7 million,” Johnson said. “That will hit every school district, and ours included.”

The meeting was attended by around 30 community members, teachers and district employees as Johnson reviewed the financial information provided during the April 20 meeting, which was reported in the April 29 edition of The Republican.

“These are based on real numbers, because of the funding shortfall,” Johnson began. “This current school year, we are expecting to not receive over $56,000 that we should be receiving for transportation costs and almost half a million dollars that we should receive from our student adequacy target (SAT). This is what Dr. (Jeri Kay) Hardy was talking about, the budget conference between the Senate and the House, trying to decide how much they’re going to try to infuse into public education to help us out.”

Board member Kari Nolting explained the SAT.

“SAT is what the state gives us per pupil based on the foundation formula, which is extremely underfunded from the way the formula was set up 20 plus years ago,” Nolting said. “Which the state is trying to rework. There’s no solution, because they keep cutting funds to put into the formula to increase the per student money from the state. According to state statute, we’re supposed to be receiving $7,100 per student. We’re currently receiving right at $6,900 or a little less. Next year, they’re anticipating it’ll be $6,700; that’s why you see that cut.”

Johnson said the current projection out of the state legislature is another $100,000 loss in transportation and $300,000 lost in the SAT. The total loss from just those two funding examples is almost $1 million.

The loss is in addition to the failed bond request on the April 7 ballot. While the issue passed the simple majority, with 53 percent of taxpayers in favor, it failed to pass the super majority of 57.14 percent needed.

Superintendent Dr. Jeri Kay Hardy said the district is looking for ways to cut back.

“When people are leaving, we’re starting to absorb some of those positions,” Hardy said. “But we have to be careful when we do that so it doesn’t become detrimental to the education of the students.”

They have already absorbed two certified positions and some classified positions for a total of $100,000; however, Johnson said the expected salary increases this year are about $125,000.

“It’s a wash,” she said.

She added that the district’s fund balance, like a savings account, is still strong.

“I do want to make sure you hear me say, we currently have a strong fund balance,” Johnson said. “We’re going to make some decisions here in the short term to keep a healthy fund balance, but as it stands, we’re projected to end the year with a 40 percent fund balance.”

The district’s assessed valuation has grown to over $200 million, and with a $3.18 operations levy, it has allowed the district to be stable.

“One cent brings in approximately $20,000 to the district,” Johnson said.

However, further funding losses are expected in the SB 3, which freezes everyone’s property taxes at the 2024-25 rate. While the bill passed, it is currently being challenged. Additionally, SB 190 allows eligible senior citizens to apply for property tax exemption status.

“I think everybody in this room knows we are heavily reliant and funded by our local community,” Johnson said. “It is a large burden that they’re funding public education.”

Additional financial losses include the natural end of the COVID ESSER funds, which the district used previously to purchase a high-quality English language arts curriculum.

Hardy said they knew in the 2025-26 school year they would be spending down the fund balance on projects that needed to be completed, but with the expected deficit in 2026-27, there will be significant cuts in the 2028-29 school year.

“That’s if everything keeps going and continues to go like it currently is with legislation,” Hardy said.

Johnson said that without the debt service levy to help maintain buildings, maintenance will come out of the district’s severely depleted operations budget. About 76 percent of the district’s operations budget is spent on salaries for teachers and staff, and the remaining 20 percent is on curriculum, transportation, activities, etcetera.

“We are now to the point where, over the course of the next three years, we may be doing some not on purpose deficit spending,” Johnson said. “No more extra projects, and no more extra.”

Hardy told the board they need to keep an eye on building maintenance. There are several HVAC systems that are reaching life expectancy and will require more maintenance work and costs. A boiler went down a couple of years ago, and Hardy said it cost the district $50,000 in unexpected maintenance.

“Someday there may have to be a bond issue for HVAC units or for roofs or things like that,” Hardy said. “But right now, we are in really good shape, because we put all those things on rotation.”

After sharing the grim financial situation, Johnson said they need to begin looking for solutions, of which there could be a combination, but there are really two paths. Path one, the district plans for no revenue growth and future state budget cuts.

“We’re going to find where we can cut anything to get us back to not deficit spending,” Johnson said. “It would require us to downsize the district footprint. It might include things like deferring curriculum resources or reducing transportation.”

The district currently buses 70 percent of its student population. The state only reimburses 75 percent of transportation costs in the foundation formula, and is looking at closer to 50 percent reimbursement in the future.

“We also provide pickup in town, and that’s not something we have to do,” Hardy said. “So when you’re looking at cuts and transportation cuts, some of your town routes — those will have to be examined.”

The state does not require the district to transport students within a three-mile square radius of the campus.

Johnson said path two would redirect the local investment in the school by voluntarily rolling down the debt service, which is already decreasing from 67 cents per $100 of assessed valuation to under 15 cents in August, to finish paying off the district’s remaining debt.

“Then we ask our community to invest some or all of those 67 cents into our operating levy,” Johnson said.

The district would need a simple majority vote to move funds from the debt service levy, which can only be used for capital improvements, to the operations levy, which drops into the general fund.

“When we look at the power of a penny being $21,000, that’s your job as a board to decide what pennies, if any, that you want to levy for operating.”

The board has until the May meeting to decide if they want to move forward with something on the August ballot.

Board member Jason Crowe suggested working with the community to see what they think the district should cut to save costs. Hardy added that if the board decides to wait, there is another piece of legislation being reviewed that would move the non-partisan April elections to combine with the November elections.

Crowe suggested making a tiered list of the most important to the least important obligations, with community input.

“I think that could be a way to start, give us some time to digest it a little bit and think about some of those cuts and where we’re at,” he said.

The board agreed to revisit the discussion in May.

“We will work on coming back to cuts and efficiencies to the tune of $700,000,” Johnson said.

A full video of the meeting can be found on the Gasconade County Republican’s Facebook page.