Budget uncertainty is growing for schools across Missouri and will impact St. James, Superintendent Tim Webster reported on April 15 to the Board of Education. As projected education funding drops, the district is looking at tightening its budget.

Missouri’s public schools receive state funding through a system called the State Adequacy Target (SAT), which determines how much money it should cost to educate one student for a year. That number is then used to determine how much funding a district should get. 

A key factor in this funding relies on revenue from taxes collected on things like casino gaming, tobacco and the lottery. This year, however, revenue was lower than the state anticipated, specifically from online sports betting. 

Sports wagering was first approved by voters in November of 2024, and although Missourians bet more than $500 million in the program’s first month, most of it wasn’t taxable revenue. Companies issued a large amount of promotional offers, like free bets, which they can deduct before paying their taxes.

This led to the state collecting just over $500,000 in tax revenue, which was well below expectations, and will impact funding available to public schools statewide.

According to Webster, the district was notified at the start of the month that the state will not be able to meet its per-student funding obligations.

The district was supposed to receive $7,140 in funding per student for this school year, and the budget is based around this number. Now, Webster said, the state has decreased that number to $6,900.

Next year, the available funding is expected to decrease even further to $6,740 per student.

“The scary thing with this, the state is just saying ‘it’s not that we’re not funding you – we don’t have the money,’” Webster said. “Currently, as they’re underfunding us this year and telling us they’re going to underfund us again next year, there is $190 million still sitting in the Prop C account, untouched.” 

The district has since been forced to cut $525,000 from its budget this year. Though it is currently balanced, Webster does not anticipate being able to present the board with a balanced budget come June.

When looking ahead to next year’s budget, based on the expected funding of $6,740 per student, Webster said the district will be operating at a $73,000 deficit. This number is without any staff raises beyond what the state requires for yearly salary increases based on years of service.

“The silver lining here is that St. James school board has been very financially sound, and they have protected our patrons’ money,” Webster said. “We do currently sit with a 41.55 percent reserve, which I will be the first to admit that is high.”

A school district’s reserves are like a savings account that can act as a buffer for anticipated expenses. Webster said the target range for reserves is between 25 and 30 percent, so the district is in a good place. 

However, according to a budget forecast in Webster’s report to the board, reserves are expected to see a steady decline in future years due to the funding challenges and could be depleted to as low as 9.44 percent by 2032.

Moving forward, the district’s goal is to be proactive rather than reactive. Building principals are currently assessing open positions and how necessary they are to fill. Webster hopes to get through the next few years and fill non-essential positions when funding eventually improves.

“We are going to do the things that require us to educate kids, but we might not be buying some of the extra things that we want to use to educate kids,” he said. “Our goal is to keep ourselves out of a situation where we would ever have to face job cuts or do something that would not best affect student outcomes.”

Webster compared the current funding challenges to the instability Missouri’s schools last experienced during the 2008 financial crisis, when state revenues dropped and districts faced widespread budget cuts. 

“I don’t want to leave you feeling doom and gloom, but if you don’t get the fact that this is real and tough times are coming, then I’m not doing my job right now,” he said.

In other news, the board certified the municipal election results and reorganized. Three seats were up for election with five candidates in the race. Incumbents Melanie Davis and Wes Gahr sought reelection alongside Kendra Swee, Jessica Roy and Linda Wischow. 

The three candidates elected to the board were Gahr with 488 votes, Davis with 373 votes and Roy with 355 votes. Swee received 265 votes and Wischow received 142 votes.

Former Vice President Tim Wilson was appointed president, as former president Jon Rapp did not seek reelection. Gahr was appointed vice president and Shannon Parsons was reappointed to serve as secretary.

The board also discussed changes made to the 2026-2027 student handbook. Some notable updates include:

• Inappropriate use of artificial intelligence (AI) has been added as a form of academic dishonesty.

• Unauthorized congregating is considered a violation. Groups of two or more students who gather together in a place without permission that impedes the safe flow of traffic, facility use and/or jeopardizes the safety of themselves and others are subject to punishment.

• Letters will be sent home to parents/guardians from the school when a student misses four, seven and nine days, which was updated from the previous policy of five, eight and ten days.

• Students in Alternate Classroom Study/In-School Suspension are not allowed to practice or compete in any after school club or athletic activity on the day ACS/ISS is served.

• To participate in school sponsored activities (dances, clubs, events, etc.), a student must be in attendance on the day of the activity for at least half of the day. A student who is absent from school on the day of any school related activity will not be permitted to participate in said activity without a written release from the school principal.

The board also approved changing its regular meeting date from the second Wednesday of every month to the third Wednesday of every month. Next month’s meeting will be at 6 p.m. on May 20 in the Central Administration Building.