Spencer County superintendent details proposed one-year step freeze as district works to close $1.5 million gap

Budget shortfall triggers personnel and spending review

Spencer County Public Schools leaders are preparing a set of cost controls after identifying a $1.5 million budget shortfall for the 2025-26 school year. Superintendent Will Foster has described the situation as a “reset” that requires the district to reduce spending so expenditures align with recurring revenue.

The budget problem, as outlined by the superintendent, stems from a revenue-side miscalculation tied to a line item commonly referred to as “on-behalf” payments—state-paid costs associated with employee benefits such as health insurance and retirement. The district has said the error created the appearance of additional available revenue in the tentative budget.

What the superintendent says happened—and when

District leaders have stated that the issue was discovered in August 2025 by the district’s new chief financial officer. The district reported that it corrected the problem before the working budget was adopted on Sept. 30, 2025, though the correction required significant adjustments. District leaders also said money was taken from the contingency fund to help offset the impact of the shortfall.

In public discussions, Foster has emphasized that the district must adjust both personnel and operating costs to avoid spending more than it brings in. He also said the district intends to rebuild reserves by increasing contingency levels by one percentage point each year.

Proposed one-year pause on step increases

Among the cost-saving options discussed publicly is a proposed one-year pause on step increases for employees. Step increases are scheduled pay progression tied to experience and tenure. The concept has prompted concern from some employees and parents who argue that pausing step movement reduces expected compensation growth during the freeze year and could have longer-term effects depending on how future steps are handled.

Foster has said he met with staff members at each school following heightened public attention to the budget issue.

Staffing and program impacts remain a key question

Community concerns have also included the possibility of job reductions. District leaders have acknowledged that cuts are part of the broader adjustment process, but specific numbers have not been publicly finalized.

At the same time, the superintendent has said he is confident school programs will not be cut and has described how staffing decisions are influenced by enrollment, exceptional child education caseloads and available budget. He has also said the district does not unilaterally choose which individual positions are eliminated, indicating schools make staffing decisions within established allocations.

• Identified budget gap: $1.5 million (2025-26)
• Issue discovered: August 2025
• Working budget adoption date cited by district: Sept. 30, 2025
• Proposal under discussion: one-year pause on step increases

“We have to reset personnel [and] operational cost and land at the spot that we spend less than we bring in.”

The Spencer County Board of Education is expected to address the proposed measures in a public meeting scheduled for 6 p.m. Tuesday.