The financial outlook for Hamilton Southeastern (HSE) Schools in 2026 appears steady, but district officials warn of growing challenges in the years ahead.
Chief Financial Officer Tim Brown told the school board’s Finance Committee Tuesday that while 2026 revenues are expected to hold up, changes in state tax policy will begin to strain the district’s referendum funding starting in 2027.
Superintendent Patrick Mapes said new state rules on local government finance could force HSE to revisit its current referendum in 2028. “In 2026, you will see a lot of school districts go and fix their referendum rate,” Mapes said. “And that’s probably something that (HSE will) have to do in ’28.”
Property Tax Changes Impacting Revenue
Brown explained that state lawmakers have expanded property tax deductions, gradually reducing the base value on which tax rates are applied. For HSE, this will erode revenue from its voter-approved referendum rate, which cannot be changed without another referendum.
Brown projects the referendum will generate $27.5 million in 2026, but revenue will drop to $26.6 million in 2027, $24.7 million in 2028, and $25.1 million in 2029. While assessed property values are expected to rise, the expanded deductions will offset those gains.
Class Size Concerns
Mapes reminded the committee that class sizes were a central issue in passing the last referendum. He said the new revenue pressures will likely affect staffing. He proposes class sizes remain the same for grades kindergarten through grade 3, but look at changes in grade 4 and above.
“I think, in order for us to be realistic about what we’re doing and trying to keep staff in place, we’re not going to be able to maintain 25 & 26 (students per class). It could mean we go to 26 in all of them,” Mapes said. He noted that even a small increase in class sizes across a district as large as HSE has major implications for staffing costs.
State Tuition Support Declines
For the 2025–2026 school year, HSE will receive $7,121.04 in tuition support for each student—an increase of $281.90 per student. However, after factoring in the district’s new obligation to cover the cost of curricular materials, the net gain falls to $124 per student.
The official state student count will be taken October 1. Brown’s projection shows 20,262 in-person students and 14 in virtual programs enrolled for 2025–2026. Because enrollment is down from last year, state tuition support will fall by about $359,302. Without the benefit of out-of-district transfers, Brown said the loss would have been closer to $900,000.
Consumables Fee Proposal Coming
Looking ahead, Mapes said he plans to propose a “consumables fee” in spring 2026. The fee would cover one-time-use items such as workbooks, food for culinary classes, or science lab materials. He estimated the fee would be no more than $100 per student and would take effect in the 2026–2027 school year.
Brown said no tax rate changes are expected in 2026, but “difficult conversations” are likely after that as referendum and operations funding continue to feel the effects of state property tax changes.
You can access Tim Brown’s presentation before the Finance Committee at this link.