💸 Flexible school funding is down $3.61 million, even though overall property values are up.
🏫 Raises for staff are limited by small state funding increases and categorical spending restrictions.
✂️ The district cut 57 positions and restructured departments to save $6 million and protect reserves.
NICEVILLE — The Okaloosa County School District is navigating a challenging fiscal year, with declining flexible funds and modest increases in state allocations limiting its ability to boost staff salaries, despite a growing overall budget fueled by rising property values.
During a workshop held on July 28, School Board members and staff reviewed the tentative 2025-2026 budget totaling $843.7 million.
Financial Director Shelia Perry explained that while the general fund increased by $2.42 million, the district’s flexible operating budget, the portion available for classroom salaries and operational expenses, dropped by $3.61 million.
A key driver of the tension is the state-mandated Required Local Effort millage, which decreased slightly this year from 3.131 to 3.129. However, rising property values added $1.25 billion to the tax base, increasing property tax bills even without a millage hike.
“We don’t have a choice on what they tell us on this millage part,” School Board Member Lynda Evanchyk said. “It’s going to look like we’ve raised the millage, but this board has not voted to up any kind of millage.”
Perry confirmed, “Even though the millage went down by .002, property values increased… which caused an increase in property taxes. But we don’t have any choice on that mileage.”
Perry added that the district is legally required to levy the state-specified rate to receive approximately $144.7 million in Florida Education Finance Program (FEFP) funding.
The total advertised budget is $787 million, though the board will vote on a higher figure once internal medical service funds are added.
Perry attributed the reported 1.3% decrease in the operating budget primarily to the expiration of federal Elementary and Secondary School Emergency Relief Funds (ESSER) and lower debt service needs from a declining Certificate of Participation payment.
Despite fiscal constraints, the board praised staff efforts to maintain a healthy fund balance. The current reserve stands at 8.6%, well above the 3% statutory minimum required by the state.
“We’ve heard some districts are dangerously close to that 3%,” said Board Member Tim Bryant. “Good job on keeping this.”
Still, challenges remain, especially regarding compensation. Superintendent Marcus Chambers expressed a desire to offer more substantial raises.
“I would love to give our teachers, staff, administrators as much of a responsible raise as we could,” Chambers said. “But we have to work within the confines of what we’re provided.”
Much of the public confusion around school budgeting stems from categorical funding, board members noted — state and federal grants that can only be used for specific purposes.
“A lot of people don’t understand why we can’t do bigger raises,” Evanchyk said. “But we just can’t take any money we have and use it for anything.”
Perry also explained that new revenue for raises primarily comes from increases to the Base Student Allocation (BSA). Last year’s BSA increased by $191 per student, while this year’s rise was a mere $42.
Chairman Lamar White highlighted the difficulty this presents.
“We used to say $200 per student wasn’t even enough to keep up with insurance and other rising costs,” White said. “Now with inflation, that figure would likely need to be higher — and we only got $42.”
To offset losses, the district absorbed 57 teaching positions, cut instructional coaches, and restructured departments for a combined savings of roughly $6 million.
School District officials are expected to approve a final budget for the upcoming school year on Sept. 8 at 6:15 p.m.
Pro Communi Bono
St. Francis De Sales, Ora Pro Nobis!
