Mexico School District teachers could see a 3.5% increase to their annual salaries next year.

The Mexico School District Board of Education got a first look at the proposed salary schedule for fiscal year 2027 at its Jan. 20 meeting. The conversation regarding salaries was initiated at the Jan 20 meeting, but no resolution was passed, and the topic will be revisited in the upcoming board of education meeting on Feb. 17 when a draft of the FY 27 salary schedule will be formally presented.

The district’s total salaries and benefits are $24.9 million, which accounts for 76% of the total operating budget.

The 2026 Missouri legislative session began Jan. 7 and will not adjourn until March 30, but contracts for teachers have to go out in April, so a salary schedule must be in place before then. According to Dr. Troy Lentz, superintendent of Mexico Public Schools, proposed legislation could impact revenue for public schools and with the uncertain climate, the district must consider its tolerance for risk.

“The district is sitting on really healthy fund balances, and we’ve seen the bank funds grow every year,” Lentz said.

According to district reports, federal revenues were $7.2 million in FY 2024 and $5.3 million in FY 2025. The budget for FY 2026 calls for $3.8 million in federal revenue, an approximate $1.7 million deficit, with $29,718,254 in operating revenue and $31,340,456 in operating expenditures.

A 3.5% increase in teacher salaries will cost the district approximately $875,000 and will likely result in deficit spending. District policy is to maintain fund balances between 20% and 30% and the district began this fiscal year with a fund balance of 43.1%.

“There’s a reason to deficit spend, but you feel a little bit more comfortable about that if you are more certain of your revenues,” he said.

Additional considerations include a 6% increase in health insurance premiums, which would cost approximately $204,192 and a 3% increase in supplies estimated at $200,000.

“We don’t want to set ourselves up to be in a position where, in two or three years, we’ve deficit spent too much, and we don’t want the fund balance to fall below 20% — that starts to get scary,” Lentz said. “What’s the appropriate way to compensate staff and plan for the future?”

Mathew Pilger, board treasurer, said he supports raises for the teachers but echoed Lentz’s concern about where the district is going in terms of funding. Pilger also said the Mexico Public School District’s salaries are competitive compared to surrounding districts.

Mexico’s lowest annual salary is currently $42,700 and its highest is $73,300, which is more than the Fulton, Moberly and Hallsville school districts. The board also compared its pay scale to that of the Columbia Public School District where the lowest salary is $44,200 and its highest is $88,842.

“I think we may have to look at some other things,” Pilger said. “Can we provide childcare to some of our teachers who have kids five and under, and what about that five day week? That’s something else that should be looked at as well.”

The district reported an 89% staff retention rate, a number that Lentz said he was pleased with.

“We need them to stay,” he said. “It’s tough in education right now — the work is really hard, but we want to support people because, in my mind, the way I can support kids is by supporting the people who are working with them on a daily basis.”

The district will also host a community budget forum and finance session on Feb. 10 that is open to the public. While Mexico’s Board of Education will be in attendance, Lentz said it is not the district's intention for the board to take any action during that time.

“I don’t think this is a season where we should be expanding any programs or adding positions,” he said. “I think it’s a season where we should be investing in the people that are currently working for the district.”