2026-27 Year Funding May Require Tax Increase

McKENZIE (October 30) — In a special-called meeting, the McKenzie Special School District (MSSD) Board of Education met to discuss a potential 25-cent increase in McKenzie’s property tax rate to fund the 2026-27 school year. If approved, the property tax rate changes July 1, 2026, at the start of the new fiscal year.

Brad Davis, finance director, led the meeting and informed board members of projected budget deficits that would affect the district in the coming year.

According to Davis’ calculations, MSSD is projected to enter a $422,299.19 deficit in the 2026-27 school year. This number results from a combination of salary and benefits increases due to Governor Bill Lee’s Teacher Paycheck Protection Act and the loss of ISM and IDEA Systemic Change grants.

To make up for the deficit, Davis recommended raising McKenzie’s property tax rate by 25 cents per every $100 of assessed value. The 25-cent tax increase would generate an additional $427,750 in revenue for the school district.

McKenzie’s current tax rate is $0.7483, so the potential increase would increase the rate up to an even dollar per $100 of assessed value.

If approved, the school board may opt to increase the tax rate by 25 cents per $100 of assessed value, or they could raise it by a smaller amount depending on the district’s budgetary needs.

Davis said, “I think there’s a distinct possibility that we could do something less than 25 cents. At this time, it’s too far into the future.”

Davis’ budget projections are based on the “worst case scenario,” in which the district receives insufficient Tennessee Investment in Student Achievement (TISA) funding to make up for the required salary increases.

Until summer 2026, Davis will not know the precise funding MSSD will receive from TISA for the 2026-27 school year.

In 2026, MSSD is required to raise the minimum salary for first-year teachers to $50,000 — as a result of Governor Bill Lee’s Teacher Paycheck Protection Act. MSSD currently pays starting teachers $48,000 per year. To raise the minimum salary by $2,000 and increase all experienced teachers’ salaries proportionally, the school district plans to increase all teachers’ salaries by three percent and adjust benefits accordingly. This results in a $350,936.80 increase in salary and benefits cost to the district.

Additionally, the ISM grant is scheduled to expire soon. This grant pays the salaries of Susan Dyer, CTE director, and Beverly Emerson, STEM teacher.

The IDEA Systemic Change grants, which pay for teacher’s aides Jenny Allen and Ashli Solomon, also expire soon.

To increase teacher pay and benefits, keep the teachers employed by expiring ISM and IDEA grants and continue paying non-payroll costs, the district needs $422,299.19 in funding.

School board chair LaShonda Williams asked Davis and Superintendent Dr. Justin Barden if there were any possible cuts the district could make to decrease the deficit.

“As we look across our schools,” Barden said, “we feel like we are staffed appropriately. We’re not overstaffed in any area…It is extremely difficult for us to see where we can make cuts with current staff and keep the opportunities that we have for our students.”

While none of the board members seemed opposed to the property tax increase, some did have concerns about the difference a 25-cent increase would make.

“I mean, we’re raising taxes to break even,” said Williams. “If we’re going to raise them, we need to raise them to where we’re able to get some extra money to have some flexibility.”

In response, Davis told the board that every additional penny would generate $17,110 more for the school district.

Davis and Williams were open to the idea of increasing McKenzie’s property taxes by 30 cents per every $100 of assessed value.

“It doesn’t hurt to err on the side of caution,” said Davis.

The tax increase goes to a vote in the school board’s December meeting.

Until that time, Williams said, “I think this is something that we need to continue to talk to the community about because that’s who voted us in.”

Upon approval, the board will have to present the tax rate increase to Tennessee Representative Tandy Darby and Senator John Stevens in January for legislative action.

If approved, this would be the first time MSSD has changed McKenzie’s property tax rate since 2006, according to Tennessee’s Private Act Index.