Marshall School Board approves preliminary 2027 budget after cuts; district warned of enrollment decline and $104,600 compensatory-aid loss

The Marshall Public School District board on Monday approved a preliminary fiscal year 2027 budget that relies on $1.3 million in reductions and other measures to offset a previously planned $2.3 million deficit, following a detailed presentation from district finance presenter Sarah Kersner.

Kersner told the board the district has seen a decline of “about 65 students” over the past three years and is projecting roughly 77 fewer students over the next three years, with kindergarten intake for next year estimated at about 150 pupils. She said those enrollment trends significantly affect state funding the district receives.

The presentation emphasized a change to the state’s compensatory revenue calculation. “We are projected to lose about $104,600 in compensatory revenue based on this new funding formula, which is about 16.5% of our compensatory revenue,” Kersner said, explaining that the state now counts students who are direct-certified through county benefit programs rather than relying on free-and-reduced-lunch applications.

Kersner outlined how the district has responded: staff attrition and targeted section reductions in several elementary and middle grades, elimination of selected junior-high sports and gymnastics coaching allocations, adjusted activity fees and higher activity-pass prices, and tighter IT procurement plans. She said those measures plus other adjustments bring the preliminary general fund into near balance for FY2027.

The board heard additional fiscal context: the general education formula allowance rose to $7,683 per adjusted pupil unit, a modest $22 increase from the prior year, and the district expects continued pressure on revenues if enrollment declines persist. Kersner also noted summer-unemployment reimbursement has historically returned about $180,000 to the district but warned the state fund’s future availability is uncertain.

Capital needs were part of the discussion. Kersner said long-term facility maintenance (LTFM) funds will support a middle school parking lot project beginning this summer and that a larger high school roof project — commonly called the “new high school” roof — may require bonding and could cost an estimated $4 million to $6 million over the coming years.

Board members voted to approve the preliminary FY2027 budget after the presentation. The item passed by voice vote. The presentation materials and Kersner’s data will be available with the board packet; the district expects to finalize audited figures after the summer audit and to present any refinements in the fall.

In a related personnel action, the board approved superintendent incentive compensation tied to targets the board assessed as met; board members said Superintendent Jeremy had earlier pledged to decline that payment if the district’s operating referendum failed, and the board recorded that he will decline the compensation.

Next steps: the board approved the preliminary budget so staff can continue planning for FY2027; capital work (the middle school parking lot) is expected to start as early as next week, and the district will continue to monitor enrollment and the state compensatory formula’s impact on future budgets.