Rockwood finance staff warn DESE revenue revisions could force larger reserve use for FY27

District finance staff told the Rockwood Board of Education that Missouri’s recent state revenue outlook and DESE projections will reduce the district’s state funding and materially affect next year’s budget.

Cindy Boyes and Dan Steinberg summarized the situation: state officials have signaled a roughly $1,000,000,000 shortfall in general revenues that will lower school funding. DESE announced it expects to prorate the state adequacy target (SAT) for the current year to around $6,900 per student (the statutory SAT was cited at $7,145). Using staff calculations, the board was told that the SAT adjustment would lower Rockwood’s current‑year revenue by about $4.6 million; additional prorations to Prop C and transportation funding would reduce revenue by several hundred thousand dollars more.

For FY27 the district is using a conservative proxy SAT ($6,742) for budgeting. Under current projections the district’s previously planned use of reserves (about $4.0 million) could increase to a use of reserves near $13.7 million, moving the projected June 30, 2027 fund balance to about $88.9 million. Staff stressed that some numbers remain estimates and that the board will revisit the figures in May when more data are available.

Why it matters: staff warned that had the district begun the year with a 22% required reserve the district would have risked running out of operating cash and would likely have needed short‑term borrowing. Finance staff emphasized the importance of fund balance planning and recommended preparing clear communications for employees, parents and the community about the factual funding outlook.

Board questions and reactions: members discussed whether to consider raising the board’s fund‑balance policy above 22% in future policy work, noted rising expense pressures such as insurance increases and fuel costs, and urged coordinated stakeholder outreach. The board’s advocacy committee and staff said they will provide materials to help families and employees understand the state funding situation and the district’s planned responses.

What’s next: staff will continue to refine FY27 projections and return in May with updated estimates and proposed budget adjustments; board members asked staff to craft clear outreach materials on the financial outlook and planned next steps.