'We cannot sustain this': WCS eyes reserve fund to balance budget

The Washington County Board of Education will present an amended fiscal budget for the 2026-27 school year to the county, cutting 24 positions through attrition and $1 million in operation costs as well as using $1 million of reserve funds. The district held a called budget meeting on Tuesday after a third rejection from the Washington County Budget Committee, leaving a $5.23 million funding gap after budget reductions. The first budget request included increased pay for multiple positions, including coaching supplements. Since then, the request has been stripped, with the board proposing to remove 24 positions through attrition and retirement at the last budget meeting. In addition to those cuts, board member Eric Barnes motioned in the meeting to take $1 million from reserves in the fund balance, as well as ask the superintendent to cut $1 million in operating costs. The motion passed a divided board, with five approving votes and four dissenting votes. The board also passed a motion to update the board's policy to maintain a minimum of 1.5 months of reserve funds. Director of Schools Jerry Boyd said in an interview that new expenditures total about $4.1 million for the school year due to a 10% increase in health insurance as well as increases to salary, benefits and operational costs. Included in those costs is a mandatory State increase to a minimum of $50,000 for teacher salaries, which increases funding needs by $1.3 million, according to Boyd. "The total gap that we began with in version one was just under $7.8 million," Boyd said. "That included most of the expenditure increases, including salary and wage." Boyd noted 83 percent of the budget alone is personnel costs. After the last rejection, he said the district was met with the decision to make more operational cuts or dip into reserve funds to balance the budget. Boyd said the position of the county budget committee has essentially been 'no new funds.' He said the committee would allow $1 million in sales tax, but not $2 million when requested. "The focus has been not to raise property tax," Boyd said of the commission. A reserve fund is recommended by the state comptroller, and Boyd said the district maintains one. Boyd shared that the reserve fund is typically used for one time expenses and typically sits anywhere from $25 to $15 million dollars throughout the year. "Our fund balance will end somewhere in the neighborhood of $16 to $17 million," Boyd said. "We anticipate the comptroller's team will verify the final fund balance in August." He said that while it is a last resort, the board has dipped into the fund in the past to balance the budget. "These past several years, because sales tax revenue has been on a pattern of growth, the board has felt comfortable balancing the budget using their reserves," Boyd said. "But that amount is getting smaller, and our costs are increasing." Boyd said that while it may be an option, these are recurring expenses, and they would be faced with the same issue in balancing the budget next year, with an even more limited amount. "If they decide they want additional reductions, we'll have to identify those, but if they decide to balance the budget with their reserves, they know they face reductions again next year," he said. Boyd said the alternative would be more cuts to personnel costs and potentially programs. "If we don't have the budget to support the position, we may not have the position next year," Boyd said. "As we get to more reductions, it becomes very difficult to not negatively impact programs and services." He said the board could look at increasing enrollment or continue to decrease staff through attrition to meet future costs. "The only other option is increased enrollment," Boyd said. "We're in line with a lot of school systems across Tennessee as far as seeing a decline in enrollment over the last four or five years." Board members also looked at cutting instructional materials to come up with $1 million, but Boyd said it all came back to personnel cuts. Members of the board estimated they would have to cut too many instructional materials before they met their goal. Boyd said they will continue to work with the budget committee to agree on the funding. "We realize there's a lot of difficult decisions that have to be made every year," Boyd said. "Our priorities are serving our students and supporting our educators and families. As we go through this process, we're going to maintain that focus."