Board approves budget for 2026-2027 school year

The Pattonville Board of Education, on June 9, approved a $120.7 million operating budget for the 2026-2027 school year. The approved budget addresses rising operational costs and flat local revenue streams while projecting a $4 million draw from district reserves, known as a fund balance. The budget highlights the district's reliance on local funding, rising operational costs due to inflation and maintaining competitive compensation and benefits.

Separate Funds

Missouri school finance law requires school districts to maintain separation between different financial funds. Pattonville operates using two primary funding buckets that legally cannot be mixed:

• Operating: This fund covers the day-to-day costs of running the school district, including staff salaries and expenses such as classroom supplies, utilities and general purchases.
• Debt Service: This fund is legally restricted to paying off the district’s voter-approved long-term debt, including debt-related facility improvements funded by Prop S.

Money allocated to the debt service fund for building improvements cannot be transferred or used for operating costs such as salaries or benefits. This structure ensures that voter-approved bond funds are spent as promised to the community.

The Big Picture

To reconcile the $4 million deficit between operational costs and revenue, the district will utilize its fund balance to cover the gap. The fund balance serves as a district’s savings account. The minimum amount to keep in reserves is at least 24% of the upcoming year's expenses, ensuring there is enough money available for payrolls through December when tax payments begin to be received. Dipping below this threshold forces districts to borrow against future tax receipts to cover basic day-to-day costs. 

Pattonville has approximately $57.1 million in reserves, but is expected to drop to $53.2 million by June 30, 2027. A fund balance drops when a district's annual operating expenses exceed its total incoming revenue, requiring it to use savings to cover the deficit. In Pattonville's case, this deficit is caused by flat local property tax revenues and limited state aid colliding with inflation-driven increases in operational costs. While Pattonville’s current reserves remain healthy enough to prevent short-term borrowing, multi-year deficit spending poses a long-term risk.

Where the Money Comes From

Unlike many school districts across Missouri that depend heavily on state funding, Pattonville relies on local revenue sources for 85% of its operating budget. The vast majority of this revenue is generated through local property taxes. State funding accounts for 11% of the district’s revenue, while federal funding is at 3%. The final 1% comes from other revenue sources, such as student activities, sale of surplus property and fees from other local educational agencies (LEAs).

Because 2026 is a non-reassessment year in St. Louis County, local property tax revenue is expected to remain largely flat, down slightly by 0.95% due to anticipated property value appeals following a significant increase in assessed values during the 2025 reassessment cycle. Due to these appeals, the district has budgeted for local property tax revenue to increase only with new construction. Estimates indicate this will generate approximately $331,850 in additional operating tax revenue.

The district's state and federal revenue outlooks also present restrictions:

• State Funding Limitations: Under the Missouri Foundation Formula, Pattonville ranks 511th out of 520 school districts for basic state aid per student, a calculation driven by the historic strength of the district’s local property tax base. Under this formula, Pattonville continues to be a hold harmless district, receiving $5.3 million per year or approximately $875 per student. The hold harmless designation means Pattonville received a higher level of funding under an older state formula than the current formula provides. As a result, Pattonville is held to the same level of funding it received in 1992. 
• Federal Grants: Federal funding allocations to the district have decreased by more than $312,000, or 8.3%, for the 2026-2027 school year. This decrease is primarily due to a reduction in Title I, II and III funding based on DESE’s preliminary allocations and the district’s use of carryover funds in the 2025-2026 school year.

Where the Money Goes

While operational expenditures are rising, the increase is driven by deliberately investing in staff. Personnel remains the largest expenditure of district expenses, with salaries and benefits for staff accounting for $97.1 million, or 80%, of the operating budget. By keeping overall staffing levels flat and optimizing existing roles, the district was able to prioritize competitive salary increases and navigate rising healthcare claims costs. This targeted approach ensures that taxpayer dollars directly support classroom instruction and staff retention while controlling the district's long-term operational costs.

Staff salaries will increase by $2,386,800, or 3.3%. Nearly two-thirds of salary funds go to certified staff. The 2026-2027 school year is the second of a two-year staff salary agreement that provided a 2.49% increase for certified staff and a 3.5% increase for support staff. There is a decrease in administrative and support staff salaries compared to the 2025-2026 school year due to retirements and resulting staff changes, including the reallocation of work and roles to better meet district and school needs.

While strategic changes to insurance plans since 2013 have historically kept Pattonville’s rate increases below national trends, the district has experienced an unexpected surge in health care utilization over the last two years. Insurance claims exceeded projections by approximately 20% in 2024-2025 and 30% in 2025-2026. The cost for eligible employees to receive health and dental benefits has not increased for eight out of the last 14 years. 

Following an actuarial review to ensure the long-term sustainability of the benefits program, the district is implementing a mix of premium adjustments and plan updates for the 2026-2027 school year. These changes are expected to result in a 4% increase in the health insurance budget for 2026-2027 while working to stabilize the health plan's long-term financial health.

The high concentration of funds dedicated to staffing leaves limited flexibility for broad budget reductions without affecting staffing levels, program offerings and ultimately the student experience. In an effort to control costs, the district has successfully implemented efficiency measures, including transitioning select contracted student services to internal operations. The primary decrease is attributable to replacing the ACE alternative high school program with an in-house program, resulting in approximately $275,000 in reduced contracted service costs while adding only one district staff position. 

Looking Ahead

Long-term financial projections suggest that without changes to funding structures or expenditure adjustments, the district will continue to spend down its operating reserves during the coming years. Exploring avenues for additional revenue and/or cost saving measures may become necessary in the future to maintain current educational programming and fiscal stability.

Find Out More

View the budget document

Read the budget presentation

Narrated Budget Presentation Video

This video, narrated by chief financial/operating officer Mary Jo Gruber, explains the budget for the 2026-2027 school year.

Watch on YouTube.