The Hillsboro R-3 School District is expected to spend $2,690,623 more than it brings in for the 2025-2026 fiscal year.
Hillsboro Board of Education members voted unanimously June 26 to approve the budget for this fiscal year, which began July 1 and ends June 30, 2026.
According to the budget, the district projects expenditures at $46,514,457 and revenue at $43,823,834.
District director of finance Jennifer White said the district has intentionally reduced the operating levy by 30 cents per $100 assessed valuation to an estimated $3.0007 per $100 assessed valuation and allocated that 30-cent levy to the capital projects fund to pay for facility improvements with cash, instead of taking out bonds or loans.
“Think of it like having a savings account and setting aside money for a car, then paying cash when you buy it. We have already received revenue for these projects in previous years. We are not spending money we do not have,” White said. “Instead, we haven’t spent the money in prior years when we received it, creating a surplus. Our budget clearly outlines all planned expenditures, including the use of previously saved funds, so we can pay cash for our capital projects, rather than incur additional costs from loans that would burden taxpayers.”
The district also has an estimated debt service levy of 22.9 cents per $100 assess valuation, she said.
Debt service expenditures are set to decrease considerably compared to the 2024-2025 fiscal year, with the budget calling for the district to spend $1,120,786 in principal payments toward its general obligation bond debt. In the 2024-2025 fiscal year, the district paid $11 million toward its debt. By the end of the 2025-2026 fiscal year, the district’s debt balance is projected to be $647,511, significantly down from $27.7 million in 2019, according to budget documents.
“As a district, we are very aware of the costs associated with loan and debt interest,” White said. “It has been a key factor in how we save, spend and protect the money entrusted to us by Hillsboro community taxpayers.”
The new proposed tax levy will also be the fourth consecutive year that the district has lowered tax rates. School officials will submit the tax decrease for approval in September.
White also said the Hillsboro R-3 tax rate is the lowest in Jefferson County by a “wide margin.”
Operating budget
The new budget also projects the school district will bring in $144,198 more than it spends in its operating budget, which covers day-to-day expenses, such as employee salaries and benefits, as well as supplies and services.
According to the budget, the district will receive $41,175,088 in revenue for the operating fund and spend $41,030,890 from that fund. White said the district is pleased to have a small surplus in the operating budget.
Staff salaries and benefits will cost an estimated $31,479,491, making up 76 percent of the operating budget, Superintendent Jon Isaacson said.
The new budget has the district spending a total of $24,051,082 on employee salaries and $7,428,409 on benefits. Of that, $24,051,082 is for employee salaries and $7,428,409 for benefits.
During the 2024-2025 school year, the district spent a total of $22,805,544 on employee salaries and $7,181,671 on benefits, totaling $29,987,215. While salaries are up about 5 percent for all district employees for the 2025-2026 fiscal year, the district has reduced the number of its administrators, so it will spend 3.62 percent less on those salaries this school year for a total of $2,006,596, Isaacson said.
“We decreased our administrative salary spending by $75,350.93 due to the elimination of a Central Office administrative position, the restructuring of those duties, and the reorganization of the Primary administration for the new Early Childhood Center,” Isaacson added.
The starting salary for teachers will increase by $1,700, raising that beginning pay to $44,500, with the average teacher annual salary increasing by $1,978, up to $57,000. The district will also expand the number of staff members, including two new certified and six new classified positions. According to Isaacson, the district has approximately 400 employees.
“It takes every single one of us to run a school well, not just teachers and administrators,” he said. “From paraprofessionals to maintenance staff, technology specialists to secretaries and bus drivers, each role is essential to creating a safe, supportive, and great school district.”
Isaacson said there will be a 3.4 percent increase in benefit spending to “ensure that staff continue to receive high-quality, affordable access to health, vision, dental, and life insurance, as well as retirement contributions to PSRS and PEERS.”
District employees are also eligible for a $150 reimbursement on wellness expenses, such as gym memberships.
About 21 percent of the operational budget consists of purchased supplies and contracted services. The remaining 3 percent of the operational budget is for debt services, capital and other expenses.
White said the district’s reserves are some of the strongest in Jefferson County. This fiscal year’s ending balance for the operating fund, or the reserves, is projected to be $17.39 million, or 42.38 percent, of the annual operating expenses.
That’s up from last year’s ending operating fund balance of $16,564,596. White also said revenues, such as delinquent taxes, federal program revenue and investment earnings, came in higher than expected for the 2024-2025 fiscal year, which amounted to an additional surplus of $1,137,214.
For the previous fiscal year, White anticipates closing out the budget with 44 percent in reserves.
White said the district’s goal is to keep between 18 and 22 percent of its operating budget in reserves.
“These reserves were created for situations like this: to support important investments in students, student programs, staff and facilities,” she added.
Capital improvement
The newly approved budget will allocate $3,084,266 for capital improvement projects.
“These improvements are part of our short and long-term planning for safe, modern and functional facilities for our students and staff,” White said.
She said key capital projects budgeted for this school year include major technology infrastructure upgrades, roof maintenance at the Junior High and Primary schools and construction and start-up equipment for the new Early Childhood Center.
School officials expect the new Early Childhood Center to open later this fall.
Other planned capital projects include the purchase of two new school buses, upgrades to district food service equipment, payments for asphalt and paving projects, as well as the resealing and striping of the high school track.