Finance presentation: Shoals Community Schools projects multi-year shortfalls as enrollment falls

Chad Blacklock, the district’s contracted financial forecaster, told the Shoals Community School Corp board that a combination of declining enrollment, rising costs and recent state policy changes has created sustained financial pressure for the district. "Every kid is worth $6,967 right now," Blacklock said, noting that foundation funding will rise to $7,071 in July but that the increase does not close the gap between revenue and expenditures.

Blacklock summarized how the state counts enrollment twice a year — in February and October — and showed Shoals’ counts have fallen from a peak of 653 in 2021 to 564 in the spring 2026 count. "Since spring of 2019 we've lost 52 kids," he said, adding that the district has been losing about eight students per year on average since 2019 and roughly 20 per year since 2023. He said losing one student translates to roughly $7,000 in state revenue.

Blacklock also described two major revenue pressures: property-tax caps and a new homestead credit. He said the homestead credit (the lesser of 10% or $300 per homestead) is projected to reduce Shoals’ 2026 property-tax revenue by about $64,400. "That $64,400 is new revenue loss," Blacklock said, calling it a permanent reduction to the operations fund.

Using those assumptions, Blacklock presented cash‑flow scenarios that showed the district’s education fund could finish 2026 with an estimated negative $1.8 million in cash under a modest-loss scenario, or a negative $2.7 million if current accelerated enrollment trends continue. He urged development of a three‑to‑five‑year financial roadmap, targeted marketing to attract students, and outreach to state lawmakers about the impact on small rural districts.

Brian Harmon, the district’s budget consultant, echoed the priorities and advised the board to consider options including an operating referendum, improved marketing, and careful right‑sizing of expenditures. "When your student count is going down," Harmon said, "that combined with circuit breaker and the homestead credits is lowering revenue at a tremendous pace."

The board did not adopt any new revenue measures during the meeting; Blacklock and Harmon said next steps include work on long‑range planning and exploring community options.

The presentation included detailed enrollment tables, a review of state funding mechanics, and examples of cost increases (insurance premiums and bus prices) that have accelerated pressure on the operations fund. The superintendent and consultants said the district is developing multi‑year scenarios to guide decisions about staffing and programming.

The board scheduled follow-up budget work as part of its planning; a formal decision on referendums or other revenue tools was not made at this meeting.