NEWPORT, Ky. — The Newport Independent School District board voted Wednesday to balance its $1.9 million budget deficit — but it's only a band-aid of a solution on a much bigger issue.
The school board held a special meeting Wednesday to address the district's 2025 fiscal year budget.
The meeting comes nearly two weeks after the district's annual budget was supposed to be turned into the Kentucky Department of Education, but they asked for an extension because of the deficit.
At a Oct. 2 meeting, the board reported that it had a $1,963,993 million deficit. That number comes from total projected revenues of $17,766,986 and total expenses of $19,730,979.
On Wednesday, the board decided to move a cushion they'd built in, in case they had to pay out retirees, from their expected expenses to the investment account, which is effectively the district's back-up funds. The board also decided to take funds from other expected expenses to help with the deficit. Newport Independent Schools Finance Director Jennifer Hoover said these decisions will not affect current teachers.
"100% we have the money, we are just leaving them in our investment account until we actually need them," Hoover said.
The board voted to then move $1 million into the district's general fund from the investment account to cover the rest of the deficit. The excess money remaining from the $1 million taken will be put into contingency so it cannot be spent.
Hoover previously planned to transfer almost all of the budget deficit from the investment account to help balance the budget, but the board wanted to find other ideas without borrowing as much money from that account.
“It does put us in a financial strain because it takes away our backup, our fallback, in emergencies,” Newport Board of Education Chair Ramona Malone previously told WCPO content partner LINK nky. “If something should happen, we won’t have that money to fall back on."
While the board may have figured out the 2025 budget, the solution doesn't help with the district's potential future budgeting issues.
On top of needing to pay back the $1 million to the investment account, the district may have to work with a much lower budget next fiscal year.
"Next year, we'll probably have a $425,000 beginning balance," said Aaron Sutherland, Newport Independent Schools board member. "So, we're gonna have to make some pretty deep cuts next year based on the fact that we're gonna have a million and a half less dollars."
Hoover clarified that a possible $425,000 budget next year would only be the case if the district made no revenue this year.
For now, the district's proposed 2025 budget will need to be approved by the Kentucky Department of Education before they can look to the future.
