KNOX CO, TN (WOKI / WVLT) – Knox County Schools is asking the Board of Education to approve significant budget revisions after a combined $7.8 million funding shortfall emerged from reductions at both the county and state levels.
The district presented its revised fiscal year 2027 spending plan during a Monday work session, ahead of a scheduled board vote Thursday. School officials described the situation as highly unusual because the board had already approved the district’s $717 million operating budget in April.
Two Funding Cuts Create Budget Gap
The shortfall stems from two separate actions taken in June.
On June 15, the Knox County Commission voted to redirect two pennies of property tax revenue away from the school system, reducing the district’s local funding by approximately $4 million and lowering the operating budget to $713 million.
District leaders noted the move marks the 13th property tax penny redirected from Knox County Schools during the past four years, representing roughly $26 million in lost funding.
A second reduction came from the state. Final Tennessee Investment in Student Achievement (TISA) allocations released June 30 were $3.8 million lower than district projections. The decrease resulted from an increase in Knox County’s local fiscal capacity index, which reduced the state’s share of education funding.
Proposed Budget Adjustments
To close the gap, district leaders are recommending a combination of personnel and operational reductions.
To address the $4 million local funding loss, KCS proposes:
- Five furlough days for employees on 255-day and 260-day contracts, including district office staff and executive principals.
- Reducing elementary assistant principal contracts from 221 days to 216 days.
- Eliminating 29 teaching positions across middle and high schools, with no more than one position removed per school.
The proposed furlough days are Oct. 7, Dec. 21, Dec. 22, Dec. 31 and March 10.
To offset the $3.8 million state funding reduction, district leaders propose:
- A one-year pause on replacing student and staff devices.
- Using reserve funds for one-time vehicle purchases.
- Applying stronger-than-expected sales tax revenue.
- Redirecting unused summer learning money toward tutoring efforts.
Employee Impact
School officials said most furloughed employees will still receive an overall pay increase due to a previously approved 2% raise and step increases on the salary schedule.
Workers at the top of the salary scale may experience a small net decrease in pay.
Elementary assistant principals would see an estimated $1,881 reduction tied to fewer contract days, although raises and step increases could offset some or all of that loss depending on individual circumstances.
The district plans to provide individualized pay impact information to affected employees by the end of July.
Teacher Position Eliminations
Officials said approximately 17 employees are expected to be displaced by the elimination of 29 teaching positions. Eight schools can absorb reductions through current vacancies, while four schools can reassign staff internally.
Superintendent Jon Rysewyk said human resources personnel have already identified potential placements for about 15 of the 17 affected employees.
“We’ve worked for the last four years really trying to protect the classroom. We have to live within our means,” Rysewyk told board members.
Reserve Fund Debate
The district currently holds approximately $71 million in reserve funds, equal to slightly more than one month of operating expenses.
School leaders argued against using reserves to cover ongoing salary costs, saying it would only postpone the problem and create a deficit entering the next budget year.
During public comment, Carter High School teacher Michael O’Malley urged the board to use reserve funds for one year to stabilize the budget and provide additional planning time.
Board Members Question Their Own Raises
Several school board members voiced frustration that they recently received a 6% pay increase while district employees face furloughs and staffing reductions.
Board member Steve Triplett proposed that board members voluntarily return their raises and encourage county commissioners to do the same in solidarity with affected employees.
District legal counsel said board compensation is established under the Knox County Charter and any formal reduction would require county commission action. Voluntary donations back to the district were identified as a possible alternative.
Looking Ahead
District officials also unveiled plans for an early retirement incentive program expected to come before the board Aug. 6.
The proposal would provide eligible retirees a monthly payment toward health coverage until age 65 and is intended to create greater budget flexibility heading into fiscal year 2028.
The Knox County Board of Education is scheduled to vote on the revised fiscal year 2027 budget Thursday. A vote on the retirement incentive plan is expected Aug. 6.
