Jefferson R-7 school officials said they took a conservative approach to the district’s finances when approving the budget for this fiscal year, which began July 1 and ends June 30, 2026.
The district Board of Education approved a $16.7 million budget for the 2025-26 school year, $2.1 million less than its 2024-25 budget.
The district’s property tax rate remains at 4.5967 cents per $100 assessed valuation.
The new budget calls for revenues of $16,485,701 and expenditures of $16,701,676.63, a projected $215,975.63 deficit.
“There are still numbers we don’t have, and we will likely be doing some amendments in October. We probably won’t know until March whether we will be deficit spending,” R-7 Superintendent David Haug said.
Haug said any shortfall would be covered out of operating funds, which are used to cover staff salaries and day-to-day expenses. The district also has a capital improvement fund and a debt service fund.
He said Jefferson R-7 ended the last fiscal year with $6,264,925.06 in its reserve, about 44 percent of its operating budget, which was $14,121,794.
This year’s budget projects the district spending $14,338,701 in operating costs and ending the fiscal year with about $6,022,254 in reserves, or about 42 percent of the operating budget.
Haug said district officials are satisfied with the amount the district has saved in reserves.
“Because we took a larger loss on our assessed valuation than anticipated, we’ll likely do no better than break even at the end of the year,” he said. “There are still a lot of unknowns.
“But we’ve done our due diligence in building our reserves to withstand the Rush Island closure, and we think we’re going to be OK until the new plant gets up and running.”
‘A lot of moving parts’ to the budget
Haug said the district is facing several situations that will have varied impacts on finances in the coming months and years.
■ The district saw its assessed valuation fall by more than $24 million in the last fiscal year, primarily because of the closing of the Ameren generating facility at Rush Island.
However, the same week the budget was passed in June, Ameren announced plans to redevelop the former coal-fired plant into a gas-powered generating and storage facility over the next few years.
“We’re learning more all the time about just what that could mean to us, finance-wise,” Haug said. “It looks like, as long as they start building pretty soon, we should begin to recapture some of that lost revenue.”
■ The Buzzi Unicem plant ended its 15-year Chapter 100 tax abatement agreement this year. Buzzi had negotiated a 50 percent abatement on its personal property tax payments, but will now revert to paying 100 percent.
“But it’s actually a pretty small gain because their assessed valuation went down over that time,” Haug said. “It won’t be near what we anticipated it might.”
However, Buzzi has announced tentative plans for expansion at the plant, which Haug said could drive its assessed valuation back up.
■ The district will prepay some $600,000 in bond debt under the new budget.
“That will save the district $36,000 in interest,” Haug said. “We will, of course, be paying our normal debt service amount of just under $1.4 million.”
■ Plans are still on the table for a $400 million James Hardie manufacturing plant on the north end of the district, but construction has yet to begin.
The company negotiated a 20-year real estate tax abatement but will begin paying personal property tax on the plant and its equipment as soon as it’s up and running.
“We’re not factoring Hardie (into budget considerations) right now; we haven’t been in on those conversations,” Haug said.
■ An 88-home subdivision to be built just off Hwy. 61 across from the high school is in the final stages of planning, which would generate more property tax revenue.
■ Haug noted that Missouri sales tax revenue is down, and electricity costs for the district have gone up about 18 percent from last year.
Cautious but optimistic
School officials are cautious but optimistic about the district’s finances, Haug said.
The school board gave an across-the-board 3.88 percent increase in salaries to all staff in the new budget.
“Of course, we’d like to give more,” Haug said. “But we have to be very cautious at this point.
“We’ve halted all capital projects at this time; we’re strictly in repair and maintenance mode.
With so many things still kind of up in the air, we don’t want to place the district in harm’s way.”
Haug also got the 3.88 percent pay raise, as well as a $5,000 travel stipend and a $5,000 bump for earning a doctoral degree, raising his annual salary from $139,00 to $155,000, a $16,000, or 11.5 percent, increase.
Senate Bill 3, which was passed this year and is facing several court challenges, is the X factor in the district’s financial future, Haug said.
“Senate Bill 3 is the curveball,” he said of the law, which freezes property tax rates in some communities and in others, caps them at no more than a 5 percent increase.
“Missouri is very low – 49th, in fact – in state funding for education, making us rely heavily on our property and real estate taxes. Even when our assessed valuation goes down, we can’t recover any of that (money) due to the state’s antiquated funding formula. This bill could hamstring a lot of programs. It targets the one local mechanism we have for funding.
“Bottom line is, the complete unknown factor is what’s going on with the state Legislature. If the formula changes drastically, and SB3 is part of that, we are going to have to really rethink some things. But if things stay close to the same, and with what’s on the horizon in our district, we are in great shape going forward.”