Kirkwood district warns of state funding shortfalls as it presents FY27 budget

Kirkwood School District staff presented a preliminary FY27 budget that plans for reduced state formula and Prop C revenues driven by declining enrollment and changes in the state allocation method.

Scott (Mr.) Cook, who led the budget presentation, said the state’s funding formula and Prop C now include a larger enrollment component, which dilutes per-student payments. “We’re projecting a decrease in state formula revenues of nearly $2 million in FY27,” he said, and the district is building the budget using a State Adequacy Target (SAT) of 6,830 rather than the higher figure the state publishes.

Cook told the board that the district receives about 87% of revenue from local sources — chiefly property taxes and voter-approved levies — and that changes to Prop C and the SAT together are straining the local revenue picture. He noted that while the district is projected to finish FY27 with about $45.9 million in fund balance (roughly 47.4%), prior materials projected $50.6 million (52.9%), reflecting the impact of lower state funding.

On the expenditure side, Cook said the operating budget includes a $2.5 million increase for salaries and benefits, driven in part by an 11% increase in benefits costs. “Eighty-one percent of our budget goes to salaries and benefits,” he said, and more than half the overall budget is devoted to classroom teachers.

Cook also highlighted several discrete items in the proposed spending plan: a $395,000 lease payment for a new district laptop program, a new ELA curriculum to be implemented in 2027–28, and an initial $400,000 allocation to begin window replacement and masonry work at the historic Turner building. He said the Turner allocation comes from previously unallocated revenue produced when the board set the operating levy at the voter-approved ceiling; it is not being drawn from the maintenance fund.

Board members repeatedly thanked staff for a cautious approach while probing specifics. Lisa, a board member, praised the long-term focus but asked whether the $400,000 will be sufficient and whether more unexpected expenses should be expected. Cook said the $400,000 will shore up the south side of the building and begin a program of phased repairs but likely will not address all future needs. He added that tenant revenue generally covers Turner’s day-to-day operating costs but not major capital projects.

Debt service and the district’s bond schedule also drew sustained attention. Cook reviewed the district’s outstanding debt tied to the 2022 bond (Prop R) and said the district’s 27-cent debt-service levy is low relative to neighboring districts. He outlined three options if the debt-service reserve cap is reached: (1) roll back the levy and intentionally collect less revenue, (2) defease—create an escrow to apply excess revenue to pay down debt early—or (3) seek a new bond issue to fund capital improvements. Cook said staff will propose a defeasance plan this fall as they prepare for decisions in the coming year.

Board members highlighted capital needs across the district, including an extensive pool-pack rebuild at the Walker natatorium and ADA and flooding remediation at Tilman playground. Laura, a board member, urged the board to keep the comprehensive facilities plan in view and noted the community value of preserving older, historic school buildings.

Cook closed by urging prudence and saying the district’s comparatively healthy reserves and past voter-supported levies (including Prop K) leave Kirkwood in a stronger position than many districts, even as state revenue volatility requires planning and potential trade-offs.

The board will receive the final budget and a recommendation for a vote at its June 22 business meeting. At the end of the session the board president (who spoke as board president) apologized for an earlier action that had caused concern; the meeting then adjourned.