Leah Hauser, staff member for district finance, told the Sparta Area School District board on Sept. 8 that preliminary 2025–26 budget figures show a working gap and several revenue and expense drivers the district must address. "So we're looking at a $1,100,000 deficit," Hauser said, characterizing figures as preliminary and subject to change before the October budget adoption.

Why it matters: The board will set a preliminary tax levy and mill rate to publish for the annual meeting and must balance increased expenditures, declining enrollment and changes in state funding. Hauser framed three options for handling the debt-service portion of the levy and outlined how those choices could affect future operating referendums.

Key numbers and drivers: Hauser said the district is budgeting an increase of about $352 per pupil in the revenue limit (a state formula), that special education reimbursement is budgeted at 40% (the state budget set the reimbursement at about 42%), and that the district expects a roughly $400,000 decline in federal grant revenue mainly because a STEM grant ended. She said last year’s personal property aid was about $130,000 and noted that open-enrollment funding changes (an increase per open-enrolled student of roughly $1,140) create costs when Sparta is a net open-enrollment-out district.

On fund balances and debt, Hauser said the district set aside $1.5 million in revenue stabilization and that the current preliminary deficit would fit under that reserve. She said the district had borrowed $66 million so far on an approved $87 million referendum and plans to borrow an additional $15 million in 2025–26.

Debt and mill-rate options: Hauser presented three approaches for the debt-service (orange) portion of the levy: 1) keep the total mill rate at last year’s level (roughly $7.17) and use the extra levy capacity to pay down principal more quickly; 2) an intermediate option (management-recommended) that increases current debt payment modestly to capture additional state aid in the next budget cycle and thereby soften the need for a larger operating referendum later; or 3) set the debt payment at the minimum required so the mill rate would fall to about $6.75. Hauser explained that because state aid is formula-driven, an increased debt levy this year can generate about $0.40 of additional state aid for every extra dollar levied the following year.

Board discussion and direction: Board members raised concerns about immediate tax relief for homeowners, long-term strategy and honoring public expectations on referendum timing. Some board members said they favored faster debt reduction to save interest over time; others urged consideration of taxpayer relief. After discussion, without a formal roll-call motion, board members and administration agreed to proceed into the finance workshop using a $7.00 mill-rate figure as the working assumption for outreach and public materials.

Next steps and deadlines: Hauser said state aid certification will arrive Oct. 15 and that the third-Friday pupil count later in September will finalize enrollment-based calculations used in revenue-limit formulas. The board scheduled a finance workshop for Sept. 17 at Meadowview (5 p.m.) for a deeper review and public education; the preliminary budget and levy discussions will return to the full board Sept. 23 and the annual budget hearing is set for Oct. 21 before an October 27 adoption vote.

Ending: The board did not adopt a levy at the Sept. 8 meeting; members asked staff for additional materials and modeling ahead of the finance workshop and required publication deadlines.