Unfortunately, there are two recommendations staff made to the Board of Education based on current fiscal realities that would increase the current budget gap.
The continued use of general fund balance limits our ability to weather fiscal disruptions. This year, several unanticipated cost pressures—particularly in Transportation and Special Education, along with persistent substitute wage shortfalls and underachieved turnover savings—have already required a year-end supplemental appropriation of $5.5 million, including $2.4 million from the general fund balance. To mitigate these recurring pressures and safeguard the school system’s financial health, staff recommended implementing two fiscal stability measures.
The first is increasing the substitute teacher wages budget by $2 million dollars. For multiple consecutive years, substitute wages have exceeded the budget by at least $3 million dollars annually. These overages can no longer be absorbed through savings in other areas and must be directly addressed in the budget.
The second is decreasing budgeted turnover savings by a total of $3.1 million dollars. Special Education turnover savings have not materialized due to the need to redirect salary savings toward contracted services to meet student IEP requirements. Staff recommended eliminating the turnover savings assumption in State Category 6, adding $1.6 million dollars to the Special Education budget. Additionally, staff recommended reducing turnover savings in State Category 3 by $1.5 million dollars to create additional financial capacity to meet demands in both substitute wages and instructional staffing.
In total, these necessary efforts add $5.1 million to our funding needs, resulting in an updated gap of $20.4 million dollars.