HERMANN – The administration of the Gasconade County R-1 School District is bracing for a possible budget deficit next school year — a rare experience in recent years — resulting from cuts to education spending at the state level where legislators facing re-election have stumbled over themselves in a rush to cut taxes.

The possibility of a red-ink number on the R-1 District’s operating budget’s bottom line in the coming school year was outlined Tuesday, May 5, to the board of the Hermann Regional Economic Development (HRED) Corporation.

“We’re anticipating a deficit budget for the first time in my years here,” said Superintendent Geoff Neill, a member of the HRED board, in his report given during the panel’s regular monthly session. His concern is prompted by action in the Missouri General Assembly to come up short in funding the state’s Foundation Formula — the primary source of state funding for school districts — and the decision to reduce transportation funding. That latter decision means districts will be responsible for a larger portion of the cost of operating buses. Gasconade R-1 is the state’s 13th-largest district with buses that log about 1,000 miles a day.

The loss of revenue will be evident in places other than on the income line of the budget. Staff positions that come open won’t be filled, Neill said. He added that plans now are that staffing will be reduced by not replacing staffers who retire rather than through cuts to the roster of employees.

The lack of funding from the state will be compounded if a countywide property tax-relief program – approved by voters April 7 – is allowed to stand. Senate Bill 3 essentially freezes property taxes paid on a 62-and-older property owner’s primary residence. The program would affect all tax-dependent public agencies, except ambulance districts, in a county. One analysis of the tax-relief program estimates a potential loss of $600,000 by all agencies in the first year. Gasconade R-1 and R-1 districts would be the biggest losers of local revenue.

County taxpayers already provide 70 percent of R-1’s operating expenses while state funding accounts for about 20 percent and federal dollars amount to about 10 percent of the funding.

In other matters at the local school district, Neill said efforts are moving forward to have contractors put a new roof on the high school building in the coming days. The installation of a new roof — financed through a bond issue approved by voters in April — is scheduled to begin May 19.

Meanwhile, the replacement of heating, ventilation and air-conditioning units at Hermann Elementary School might wait until next summer, the superintendent said. One reason for that, he explained, is the time it will take to receive the units that will be ordered. The wait would not affect the ability to use the revenue from the bond sale approved by voters. The district has three years to use the bond money.

Along with the new roof and the HVAC upgrade, the other major project in the $3.5-million bond package are repairs to the parking lot of Hermann Middle School.

On another front, work is moving forward with the development of two data centers in Montgomery County as part of the industrial megasite being carved out of farmland near New Florence.

“They are moving dirt on both projects right now,” Neill said of the data centers being built by Amazon and Google. Neill was reporting on those projects from his position as a member of the Montgomery County Economic Council, an arm of the Montgomery County Commission working to foster economic growth in the area. He represents the R-1 District, the city of Hermann and HRED on the Montgomery County Economic Council.

According to local business leaders, those data centers have pledged to provide substantial funding to area school districts such as Gasconade R-1, Wellsville and North Callaway County. It’s believed that one of the companies has pledged to provide as much as $500,000 to R-1 by the time that data center is fully built out. It’s not known yet the amount of support that would be provided by the other company.

It’s also believed at least one of the data centers will be designating money for the Greater Montgomery County Port Authority District, which includes the city of Hermann. It’s believed that money could be used as grants made by the Port Authority District for a variety of economic development projects within the Port Authority boundaries. Local business leaders are hoping some of those projects would include efforts to increase the community’s housing supply.

HRED Vice President Raylene Hollrah, presiding over last week’s session in the absence of President Bart Toedtmann, continued to stress the need to push for additional housing units — both for the local residents and to meet the expected demand of workers attracted by the data centers.

“Looking forward, there are a lot of things happening” in the area, she said, noting that housing development needs to be at the forefront of discussions by groups such as HRED. “I think housing needs to be pushed up. We talk about the hospital and we talk about the school, but people got to have a place to live,” Hollrah said.