De Soto School District officials anticipate spending nearly $2.8 million more than the district brings in for the 2025-2026 fiscal year, which began July 1 and ends June 30, 2026, according to the district’s newly adopted budget.
Overall, the district is projected to bring in a total of $39,240,917 in revenue and spend $49,152,814, a deficit of $9,911,897. However, most of that deficit spending is for capital improvements to be funded with bond issue revenue previously budgeted for those projects, Superintendent Ron Farrow said.
“While overall expenditures will exceed revenues across (all fund types, including operating, capital projects and debt service funds) by $9.9 million, only $2.79 million of that total represents actual deficit spending from the district’s operating budget,” he said. “The remaining difference is not a true deficit, but rather planned spending from previously received bond funds associated with the $19 million Prop 4 Dragons bond issue approved by voters in April 2024.
“Because bond funds were received in a prior fiscal year, they do not count as new revenue in 2025-2026, even though they are being used for major approved projects during this time.”
The school district’s operating fund covers day-to-day expenses, like salaries, benefits, supplies and services. The capital projects fund covers improvements to facilities and other capital expenses, and the debt service fund is dedicated to paying off the district’s bond debt.
Farrow said a total of about $9.7 million is set aside this budget year for capital improvements, with about $8.68 million covered by bond issue revenue and the remaining $1,020,597 coming from the district’s capital projects fund.
Planned bond-funded improvements include approximately $6,668,600 for HVAC repairs and replacements, $1,331,400 for the first phase of roof repairs and $680,000 for districtwide technology infrastructure.
The capital improvement projects that won’t be funded with bond issue revenue include $113,500 for furniture and instructional equipment; $37,000 for parking/grounds enhancements; $331,524 for two new school buses; $250,000 for a secure entry vestibule at the high school; $35,000 for a maintenance vehicle; $200,000 for districtwide building upgrades; and $53,573 for Department of Natural Resources loan payment.
The 2025-2026 fiscal year budget projects the district will bring in an estimated $33,312,631 in operating revenue and spend $36,101,831 in operating funds, resulting in the $2,789,200 deficit.
The district will cover the operating fund deficit with reserve funds, leaving an estimated $8,587,232 in reserves ($10,114,959 when including restricted funds), which is about 23.79 percent of the district’s operating budget, by the end of the fiscal year, documents said.
“The district policy states we will keep reserves between 15 and 20 percent, so we are still above that margin of preference,” Farrow said.
The district started the 2025-2026 fiscal year with $11,376,432 in the reserve fund ($12,904,159 when including restricted funds), which was 31.86 percent of the district’s annual operating budget for the previous school year.
“Our focus is to protect the sustainability of our district, to honor the hard work of our staff, and to ensure we are positioned to meet the needs of our students and community for years to come,” Farrow said.
Strategic plan
Farrow said the district has put in place a strategic plan to help reduce future deficit spending.
“For the 2025-2026 school year, we are projecting a reduction in deficit spending of approximately $200,000, with an additional $500,000 reduction anticipated in (2026-2027),” he said. “These outcomes are a direct result of our ongoing strategic planning efforts and the multi-year restructuring plan that was shared with the community this past February.”
The first phase of the strategic plan is the movement of sixth graders to the Junior High School and the Innovative Learning Center (ILC) to the High School basement in August. At the start of the following school year, the district will transition to grade-level centers, making Athena Elementary a kindergarten through second grade center and Vineland Elementary a third through fifth grade center.
Farrow has said student-teacher ratios will be easier to manage with grade-level centers.
He said the strategic plan phases are being implemented to save money and avoid deficit spending as enrollment and revenue continue to decline, to enhance collaboration among educators and to strengthen the learning experience for students.
“By making these changes, we’re able to consolidate our staff and our resources and just be more efficient, or in other words, just be able to do more with less.”
He emphasized that staff reductions are being achieved through retirements and resignations only, not layoffs.
“The FY26 budget includes paying salary and benefits for additional staff to support lower elementary student class sizes and counseling and alternative programming, such as the Innovative Learning Center. As a result, district officials expect to see a reduction in fund balances. However, district changes in structure, including moving sixth grade to the Junior High and the transition to grade level centers, has allowed a reduction in staffing. This will aid in reducing overall expenditures in the budget for these items.”
Staff salaries, benefits
Farrow said the district will spend $27,316,268 on salaries and benefits this fiscal year, up $773,142 from last year. The starting salary for teachers is $42,000, up $1,000 from the year before.
He said all of the district’s 382 staff members received a minimum $1,000 increase to their base salary, as well as additional raises through steps for more experience and education on their salary schedules.
“This year, we are proud to provide the largest salary increase in over 15 years for all employees, a reflection of our unwavering commitment to valuing the people who make the greatest difference in the lives of our students,” Farrow said in a written statement to staff on June 20, the day after school board members unanimously approved the budget. “In addition, we’ve doubled the district’s tuition reimbursement total from $10,000 to $20,000 and increased the individual reimbursement per course from $300 to $500, further investing in the professional growth of our educators.
“We’ve also raised the class coverage stipend (for a certified staff member covering a class during their planning period) from $20 to $30 and taken deliberate steps to protect valuable teacher planning and collaboration time each week. And, in a nod to the evolving landscape of education, we’ve modernized our expectations by making jeans an accepted part of our professional dress, a small but meaningful shift in recognizing the dynamic nature of today’s classrooms.”
Farrow said these salary enhancements are being accomplished while the district continues to strengthen its financial footing.
The budget message noted that wage inflation and the increase from $13.75 to $15 for minimum wage could have some lingering effects on the district.
He said inflationary cost increases for fuel, energy and food have stabilized and the budgeted costs are similar to last year.
Farrow cautioned that this budget does not include any possible impacts from Senate Bill 190, related to senior property tax relief, and Senate Bill 3, which aims to expand the property tax credit program and could have a significant impact on school funding.
“With continued uncertainty in public education funding, it is more critical than ever that we remain strategic and fiscally responsible,” Farrow said.