Pulaski County Public Schools to cover rising insurance costs, pause raises as enrollment and state funding fall

Superintendent Graham said Pulaski County Public Schools is recommending that the district cover the full increase in employee health-insurance costs for next year and postpone a broad pay raise as officials wait for final state budget action.

The decision follows an enrollment shortfall the division said will reduce state revenue. "When we do the budget each year, we first wanna start with the baseline from the year that we're currently in...so we would like to take everything that we have this year and move it to next year and not lose anything," Superintendent Graham said, explaining the approach.

Graham told the board the division originally budgeted 4,176 students but that the VDOE count tool reduced that figure to about 3,927, a decline of roughly 249 students that will cut state funding. Staff later adjusted local calculations to a slightly higher per-pupil figure but said the district still faces a shortfall.

Morgan, the staff presenter, reviewed the revenue breakdown and program impacts, saying the division began from a roughly $58 million baseline, outlined Scribe program costs and noted a small decrease in VRS rates. "Bottom line comes down to we're at about a $56,000 surplus total," Morgan said, while cautioning that the figure depends on final state allocations.

Officials said the district also lost significant compensatory supplement funding compared with the prior year (staff presented current-year compensatory supplement figures as $400,000 and described the prior-year level as substantially higher) and that, combined with enrollment-driven revenue declines and a projected spike in insurance costs, the division had been able to cut an initial $3.5 million gap to just under $1 million.

Facing an estimated insurance increase of about 18% with the current provider, staff presented two alternatives with lower projected increases (about 11–11.5%), including moving into a Jefferson Health Plan consortium. But board members and staff said a key unknown is the "run-out" cost—claims submitted to the old carrier after a switch—which could be substantial. "When we go to JHP, it'll be a consortium...So either way, it's kind of of...we'll still have to find that money somewhere to pay those claims," Morgan said.

Given those trade-offs, staff recommended prioritizing paying the insurance increase so most employees keep the same take-home pay next year rather than giving a small percentage raise that could leave lower-paid workers worse off after higher insurance costs. Graham summarized the choice as a fairness decision for lower-paid staff and noted the division might pursue a one-time bonus later if revenues permit.

Board members asked about timing and next steps. Morgan said the House and Senate budget proposals differ; preliminary staff calculations showed the House version more favorable to the division than the Senate's, but both rely on ADM assumptions that must be finalized. Officials said they expect clearer numbers when the General Assembly completes action, and reminded the board the county expects a proposed budget by its April 1 deadline.

The board set a public hearing for the proposed budget next week at 5:30 p.m. and will revisit the recommendation after receiving final state and county information.