- Newport Independent School District, once bracing for a $3.9 million deficit in fiscal year 2026, now projects a $1.19 million surplus.
- The turnaround follows budget revisions, additional revenue, and expense controls that left the district with $3.65 million at the close of fiscal year 2025.
- District leaders say the improved outlook is conservative and reliable, crediting collaboration, intentional spending, and oversight from both local and state finance officials.
In January, Newport Independent School District suggested it could face a $3.9 million budget deficit for fiscal year 2026. Now the district is projecting to be in the green.
Last October, things started looking ominous for the district’s financial state with an announced $1.9 million budget deficit. By Oct. 17, the Newport Board of Education transferred $1 million from its investment fund to balance a final budget deficit of $937,930 before sending it for review to the Kentucky Department of Education.
In January, former Newport Finance Director Jennifer Hoover said the school district was facing a $3.9 million budget deficit for the 2026 school year.
The board met in a special call meeting on Aug. 13 to give the public a financial update. The board provided information on the ending budget for 2025 and the projected general fund budget for 2026.
According to projected numbers, the ending total for the fiscal year 2025 (ended June 30) is $3,658,366. The projected fiscal year 2026 ending balance is $1,190,585.
In March, the district contracted Tete Turner, a former Newport Financial Director, to provide professional finance services to the board. Turner and Newport Independent School District Treasurer Kim Snapp gave the financial update on Wednesday.
“We have reviewed these numbers, I would say, a minimum of 20 times,” Turner said. “Auditor Paul Maddox, the state of Kentucky, Department of Education was involved. We contacted Jennifer Hoover on several occasions, Kim Snapp, Tony Watts, Matt Atkins, and I believe every supervisor in the district we’ve discussed with, so we feel very strong about the numbers.”
Due to the projected deficit the year has been filled with teacher cuts and even a call for removal of former Newport Superintendent Tony Watts by The Newport Teachers Association in February. Watts abruptly announced his departure from the district in May after over two hours of deliberation in closed session at a special meeting
The conversations surrounding the district’s financial state on Wednesday was on the general fund.
Turner explained that in fiscal year 2025, the district adjusted the beginning balance (increased it by $1,373,312), added the additional revenue, and the result was that the district’s cash available to spend was $20,989,330, or $2.2 million more than the budget.
The final expenses in 2025 were $18,435,853. Turner said that number ties directly back to the annual financial report filed in July.
The committed sick leave account started and ended the year at $535,353.
“Part of the reason for the increase in expense was that there was not a liability account set up for retirees,” Turner said. “We had the money, but it wasn’t noted as an expense account. So, it was just a matter of some housekeeping.”
The state of Kentucky requires that all school districts maintain a minimum balance of 2% of specific revenues. The school’s balance totaled $3,449,512. Turner said that number is made up of two items. Number one was the continuation of the sick leave account and the second is uncommitted money that the district can spend as it sees fit.
In addition, Turner outlined two additional items that were added to the final projected balance after the annual financial report was filed. One item was $158,854 general fund expense transferred to KETS grant projects, and the other was $50,000 in city taxes projected to be received in July and August. This leaves a total balance of $3,658,366 to end fiscal year 2025.
On the expense side, fiscal year 2026 has projected expenses of $19,189,418. After subtracting the budget contingency of $871,416 and an estimated $250,000 in unused retiree sick pay, expenses are projected to be approximately $350,000 below the original draft budget of $18,350,927.
Snapp said the draft budget projected a negative ending balance of $3,511,537. The district is now projecting an ending balance for fiscal year 2026 to be $1,190,585.
“While staffing costs are built into the budget, we do anticipate additional savings as staffing is finalized, but overall, we believe our financial position is strong, and our projections are conservative and reliable,” Snapp said. “We’ve taken a careful, honest look at the numbers. What we’re sharing tonight isn’t overly optimistic. It’s grounded, it’s realistic, and it’s backed by the data.”
Newport Board of Education Chair Ramona Malone said each board member has met with the finance team to get their questions answered and to get a clear understanding of how the district got where they are.
“We’re being very intentional with all of our expenditures, a lot of collaboration looking at all of our funds, whether it be title funds, general funds, and just doing absolutely what’s best for students, but also very, very mindful of our spending,” Newport Interim Superintendent Matt Atkins said.
Here is a timeline of events since last year’s budget shortfall announcement:
Aug. 29, 2024: Newport school board approves lower tax rate
Oct. 4, 2024: Newport Independent School District faces $1.9 million deficit, board seeks solutions
Oct. 17, 2024: Newport Independent School District decreases deficit for final budget
Feb. 27: Newport teacher union calls for superintendent’s removal as board approves job cuts
March 7: Newport schools contracts former finance director to assess budget shortfall
March 10: Newport schools face intervention amid declining performance, test scores
March 12: Before cutting staff, Newport Schools seeks updated budget review
March 28: Newport teachers continue to address board of education about district conditions
May 15: Newport Schools cuts seven positions, keeps alternative school open
May 15: Newport superintendent, school board agree to part ways
June 5: Newport Schools to pay superintendent $175K in exit agreement