Columbia Public Schools prepares final 2026 budget amid tax freeze impacts; district expects US$445,000 revenue reduction offset by US$968,000 state sales tax increase

May 14, 2025 (Columbia Daily Tribune) –

Columbia Public Schools is in its final sprint toward 2026 budget approval following the approval of the state's budget on May 9 .

Providing an update Monday on the process was the district's Chief Financial Officer Heather McArthur . The district's fiscal year starts July 1 .

A significant chunk of the district budget comes from property tax collection. There also is the state foundation formula for funding and federally funded programs through the Missouri Department of Elementary and Secondary Education .

"Our (property) tax rate is assumed to be flat between this year and next year," McArthur said, adding 2025 is a reassessment year.

The district is operating under the assumption that there will not be a significant increase on assessed valuations from Senate Bill 190, which is the senior property tax freeze. That hasn't stopped the district from trying to calculate impacts prior to having finalized data back from the county, which operates the property tax freeze opt-in program.

So, McArthur is using census data for now on residential SB190 adjustments. Rate adjustments are expected to match for commercial, agricultural or personal property, but is expected to be slightly less for real estate properties. The reduced tax rate change for residential means about $10 million less in assessed valuations, McArthur said.

The best guess at this point is 8,500 land parcels that have opted-in to the tax freeze. Assuming the smaller residential tax rate increase, it's about a $445,000 revenue reduction for the district, McArthur said.

This is offset slightly by a state sales tax based on weighted average daily attendance. It's about a $968,000 revenue increase for 2026.

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The state's approved budget for public education included full funding for transportation (at best 75% of allowed costs) and an additional $300 million to reach the state adequacy target of $7,145 per student. It also includes $50 million for school vouchers that were put back in by the Missouri House in the final budget.

Even though the budget was approved by the Missouri General Assembly , Gov. Mike Kehoe still has line-item veto power, which means the district is keeping an eye out for any potential changes Kehoe makes, McArthur said.

Funding for the increased adequacy target comes from tapping state fund balances (reserves), so McArthur sees that as a one-time fix for the foundation formula unless some additional general revenue at the state level materializes between now and next year, she said.

The state is moving from weighted average daily attendance to a weighted average membership model for determining foundation formula funding in 2026. It's looking at enrollment numbers, rather than attendance numbers. It's a five year phase-in toward a calculation that is based on a 50-50 average of daily attendance and enrollment, so CPS is having to take portion of its average attendance (90%) in combination with enrollment (10%) to get the final number calculation for state funding allocation for 2026.

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"This actually helps us, but it also makes the number that we are dividing it by for the state larger," McArthur said about the new calculation.

Only using the attendance model, the district would receive approximately $78 million in state funding. With the combined calculation that number is roughly $79 million , presuming the original adequacy target of $6,760 per student.

With the target at $7,145 in 2026, this is an additional $7 million , meaning the district can put off any deficit spending by one year.

McArthur recommended against building the $7,145 adequacy target into the district budget to keep the budget conservative. This is due to uncertainty about potential foundation formula changes in the years to come and any changes Kehoe still could make to the budget this year.

With the foundation formula, plus classroom trust fund and transportation funding (which are not weighted based on district demographics), total state funding is about $84 million in 2026, about an $826,000 increase from 2025.

Speculating about potential funding beyond 2026 is difficult because of the formation of a task force by Kehoe to modernize the foundation formula, McArthur said, answering a question from board member Paul Harper . Total CPS budget is typically in the upper half of $200 million .

This article originally appeared on Columbia Daily Tribune : Columbia school district in final sprint toward 2026 budget vote