The Wake County Public School System is eyeing tens of millions of dollars in new required costs next year, just weeks after first telling the school board of a likely $7.5 million budget shortfall this year.
The school system is only making “extremely rough estimates” based on anticipated legislation, benefits costs and enrollment, among other things. But the new required county-level costs for next year could be $69.4 million, leaders told the board during its annual retreat in Cary on Wednesday.
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The school system’s operating budget is $2.2 billion, and $69.4 million in new requirements would represent roughly 3% of that budget. Those requirements would be from the county only, after expected new state and federal revenues.
On Wednesday, the finance department asked the board to consider how to handle the expected cost increases, including whether it should stop any programming. Board members didn’t suggest cutting any programs without evaluations of their effectiveness first but floated freezing nonessential hiring, reducing comparatively “generous” assistant principal funding, doubling-down on fundraising and private partnerships and turning its Crossroads FLEX High School into a separate program at each high school. The Crossroads FLEX program currently has its own building and provides approved students with hybrid remote/in-person learning environment — typically, students who are involved in highly competitive extracurricular activities.
At least one board member suggested reevaluating whether the the system should continue to provide a laptop to every student, though facilities bonds typically cover the cost of computers.
“The easy ones came quick,” Board Chairman Chris Heagarty said of the suggestions for cost-cutting, “but we really didn’t know their impact.”
Board Member Lynn Edmonds noted the challenges are coinciding with board members’ increased interest in catching up on HVAC maintenance, as schools continue to close on occasion when systems are unable to handle extreme heat and cold.
“I think we’re all concerned about the facilities budget, and we all recognize the need to fund facilities more,” she said. But she’s worried the budget challenges won’t be limited to planning for next year, because of changing enrollment patterns and the diversion of public school funds for any student who leaves for a private school, using a voucher.
“Everybody buckle up,” she said.
County commissioners have been providing budget increases for the school system in recent years, including a record $58.3 million increase for the current school year. But school system leaders don’t think the county will be able to cover the whole $69.4 million cost estimate next year, based on current county revenue projections.
The school board is already looking at cost overruns this current school year. The system still doesn’t have a plan to address that but is evaluating increased funding that recently came in from the state, based on the district’s enrollment increase.
The current shortfall is partially the result of rising school meal costs, rising contract costs, lower vacancy rates and other unexpected costs increases.
Much of the cost increases this year came from making temporary federal programs permanent using local dollars instead. Those included school-level substitute teachers who were full-time and dozens of behavior support professionals, such as counselors and social workers.
Superintendent Robert Taylor said Wednesday’s exercise gives his office an idea of the fundamental or philosophical changes board members are interested in, before he proposes a budget for the 2025-26 school year next spring.
The school board plans to reinstate its budget committee next year to review ongoing budget priorities and challenges.
But there’s not much room next year for new programs, said Terri Kimzey, senior director of budget services.
“Anything we need new funding for we’re going to have to give up something to get something,” she said.