Mar 3, 2026 By Garrett Neese 4 min read

All schools in the Albert Gallatin School District will remain in operation next year after the district board voted not to grant permission for a public hearing on closing any schools.

The 5-4 vote came at a special meeting held Thursday night that also included discussion of the 2025-26 and 2026-27 budgets.

Superintendent Christopher Pegg said based on preliminary discussions with the district’s business manager, about $1.5 to $2 million will still need to be cut from the 2026-27 budget in order to balance it, primarily from personnel.

The district originally began talking about the need to close schools back in 2018, shortly after Pegg became superintendent, he said. The influx of COVID-era grants put that on hold temporarily, allowing the district to fund its existing positions, Pegg said.

“Now that all that (Elementary and Secondary School Emergency Relief) is gone and spent, we’re back to having to fall back on our fund balance to help us balance our budget every year to make up for the shortfall in revenue versus our expenditures,” he said.

A feasibility study was completed in 2024 and presented to the board in January 2025, recommending shuttering several buildings. Public committee meetings began last March.

The talks were driven by student declines that have reduced the district’s enrollment by about 1,000 students over the past 20 years, Pegg said.

“That’s pretty significant, when you know your funding from the state is based on your student membership … we were utilizing very large chunks of money out of our fund balance to balance the budget, and that’s only going to get you so far,” he said.

One option under discussion would have closed the Friendship Hill and Smithfield elementary schools, and then combined those populations at the Albert Gallatin South Middle School, which would become K-6, Pegg said. The K-6 alignment would also have been applied to the other three remaining elementary schools — A.L. Wilson, George Plava and Masontown.

Albert Gallatin North would also have been reconfigured as a seventh- and eighth-grade middle school, Pegg said.

A secondary option would have followed those closures up with additions and renovations at the high school that would have moved seventh and eighth grades there for the 2030-31 school year. George Plava and Masontown would also have been consolidated into the then-vacant Albert Gallatin North.

With the 2026-27 budget being due by June 30, the board needed to decide sooner than the regularly scheduled March meeting, Pegg said.

“If they did want to schedule a public hearing, you have to advertise in the paper for 15 days, then you have the public hearing for each school that you would close, and then the board would have to wait three months before they can vote to actually close a school or not,” he said.

After Thursday’s vote not to schedule a hearing, the timetable rules out any school closures for at least the 2026-27 school year, Pegg said.

Pegg said the district will still need to make cuts to remain solvent, he said. The district is estimating it will need to use about $4.5 million in fund equity to plug budget shortfalls for the 2024-25 school year, leaving it with a fund balance of $4.6 million heading into the next school year.

Salary and benefits make up about 66% of the district’s budget, Pegg said. Balancing the 2026-27 budget would result in an estimated 15 teachers being furloughed based on declining enrollment, Pegg said. That would need to be paired with economic furloughs that would remove the same percentage of administrators in the district, resulting in one position being cut. Some support staff and additional programs would also need to be let go, Pegg said.

“You have to definitely look at the enrollment in every building and look at the enrollment at each grade level to see where we can cut some staff and teachers,” he said. “So it definitely won’t be easy, and we will most likely see our class size go up.”