Sioux City school finance update warns reserves will be used under conservative state-aid forecast

Patty Blankenship presented the Sioux City Community School District's updated FY2027 spending-authority projections and the general-fund targeted-expenditures framework at the board's Jan. 12 meeting, telling directors the presentation is the starting point for the FY27 budget.

Blankenship said certified enrollment fell by 302 students, costing roughly $2.4 million in revenue relative to prior assumptions. For the FY27 projection she said staff now use a supplemental state aid (SSA) assumption of 0.5% and a targeted-expenditure increase of 1.5% above SSA; those assumptions keep the district's unspent authorized balance near 31% in FY27 under the modeled scenario but would require drawing reserves in the years ahead in some simulations.

"We have an unspent authorized budget (carryover) of about $99.9 million, or 33%," Blankenship said, describing FY25 carryover and an FY26 projection of roughly $100.2 million (about 32%). She also flagged a general-fund estimated budget baseline of about $209 million for FY26.

Directors pressed for more detail on where students went and how much is attributable to Education Savings Accounts (ESAs) and private-school enrollments. Blankenship said roughly 80 students left for private schools this year and that over the past three years about 550 students shifted to private schools; the district also reported a drop in new, incoming students (notably among English-language learners).

Board members debated whether to relax the district's guiding principle limiting use of reserves to 3.5% of the balance. Director John Myers said he would be willing to draw down reserves in a year of unusual pressure rather than further cut services; other directors called for careful review and for bringing the specifics to upcoming budget meetings. Board members also urged advocacy at the state level on second-semester funding and ESA policy.

The board acknowledged the updated projections. Staff said the budget calendar will bring revenue and levy-rate discussions to the board on Feb. 9, when taxpayer notices will be set and additional budget adds and reductions will be presented.