McKenzie School Board Anticipates $15.6 Million Budget for New Fiscal Year

McKENZIE (June 3) — The McKenzie Special School District Board of Education is preparing for the proposed budget for the 2025-26 fiscal year, which begins on July 1. During an informal workshop held on June 3, Dr. Justin Barden, director of schools, and Brad Davis, director of finance, shared insights into the proposed budget of $15.6 million.

Davis noted that Carroll County recently completed a reappraisal of real estate, leading many landowners to receive notices of significantly higher appraised property values. While McKenzie is located within Carroll, Henry, and Weakley counties, only landowners in the geographic region of MSSD within Carroll County are considered part of the school district.

Although property values have increased, the new state-certified tax rate will be adjusted downward to maintain a revenue-neutral situation. Although the certified tax rate is not yet available, Davis anticipates it will be around 75 cents per $100 of assessed property value, down from the current rate of $1.1844.

This year’s budget development has been complicated by the new real estate appraisals and anticipated reductions in federal funding. A contributing factor to this decline is the decrease in the local poverty rate, which results in fewer federal subsidies for MSSD. Additionally, the district receives funding from local sales tax collections, and the State of Tennessee based on student enrollment, which will not be finalized until school starts in August.

Here are some key highlights of the proposed budget:

**McKenzie Special School District FY 2026 Budget**
- The district's current tax rate is $1.1844.
- This is a reappraisal year in Carroll County. The new certified tax rate is expected by mid-June and should approximate $0.75.
- The current tax rate is allocated as follows: $0.77 to the General Fund and $0.4144 to the Debt Service Fund.
- The total budget for all funds in 2025-26 is $15,646,204, which proposes a 3.5% raise and a $1,000 bonus for all district employees.

1. **General Purpose Fund**
- The FY 2026 budget totals $13,078,505, reflecting a 4.9% increase from FY 2025. This fund pays for 128.0 FTE (full-time equivalent) positions and approximately 35-40 substitute teachers.
- Major funding sources include state TISA funds, along with local sales and property taxes.

2. **Federal Projects Fund**
- This fund accounts for federal grants under the Every Student Succeeds Act (ESSA), IDEA, Carl Perkins Vocational, and Stop Grant. The current budget for this fund is $1,091,340, which is expected to increase once FY 2025 carryover funds are allocated.
- This fund supports 22.5 FTE employees.

3. **Central Cafeteria Fund**
- This fund, with a total budget of $986,093 for FY 2026, supports the operation of the school cafeterias and pays for 17 employees.
- The primary funding source is revenue from the federal USDA School Lunch and Breakfast Program.

4. **Education Debt Service Fund**
- This fund covers the annual payments on the district's outstanding bonds. Revenue comes from the $0.4144 portion of the $1.1844 tax rate. The total budget for 2025-26 is $472,114, intended for scheduled payments on the district's $4,000,000 bond issue for the McKenzie High School all-purpose facility.
- The total outstanding principal and interest on the district's bonded debt is $2,829,011, with the final payment due on April 1, 2032.

5. **Education Capital Projects Fund**
- This fund has been used for the construction costs and debt issuance costs associated with the McKenzie High School all-purpose facility, up to the total amount of the $4,000,000 bond proceeds, along with any additional funds earned from investments of the bond proceeds. The remaining balance of $18,151 will be allocated for future capital needs.