Palm Beach schools project multimillion-dollar shortfall as state budget proposals cut performance funding

Palm Beach County School District Chief Financial Officer Heather Frederick warned the school board that proposed state budget changes would sharply reduce revenue tied to student performance and cost factors, creating a multi‑million‑dollar shortfall for the district.

Frederick, presenting the district's FY25 update, said: "I honestly wish I had better news to report to you today than I do." She told the board the district learned in March that statewide school vouchers exceeded projections and that the Legislature's proposals would cut funding the district counts on to support advanced coursework.

Why it matters: The cuts would reduce funds the district distributes directly to high schools for AP, IB, ACE and industry certifications by shrinking the add‑on weighted FTE the state pays. That money pays exam fees, teacher bonuses and other supports that schools currently use to expand and sustain college‑level coursework for students.

Fredrick told the board the district generated 11,461 weighted add‑on FTE from students passing advanced‑course exams in FY25. Under the Senate proposal, the district would be credited for 6,622 of those FTEs, a reduction of 4,839 FTEs representing about $27 million. The House version would cut a larger set of add‑on funding and would cost Palm Beach about $32 million, she said. Combined with changes in cost factors and a lower comparable wage factor, Frederick said the district faces roughly $41 million less revenue than it expected.

Superintendent Michael Burke told the board the impact would fall unevenly on schools: "We're now looking into a shortfall in our overall budget and our high schools are gonna bear about 50% of the brunt of that shortfall because of this reduction to the add on FTE." He and Frederick said about 80% of add‑on FTE revenue is passed through to high schools, and the district estimates high schools would lose approximately $19 million under the Senate plan and $23 million under the House plan.

Frederick reviewed enrollment and program trends the Legislature used in funding calculations: vouchers (state scholarship programs) were about 24,000 students in FY25 and the state projects vouchers could grow to roughly 30,000 in FY26. District‑operated enrollment was roughly flat year‑over‑year (up by about 300 students), while charter school enrollment declined, she said. A district holdback related to vouchers produced a net loss of about $10 million that was partially offset by a state reserve.

The CFO and superintendent outlined other drivers of next year's budget picture: a projected 0.5% increase to employer contributions for the Florida Retirement System (about $5 million for the district), ongoing contractual health‑care premium commitments (about $19 million increase before reserves), and required teacher compensation spending tied to state categorical funding. Frederick said if the Legislature did not change the add‑on FTE treatment, the district's shortfall under both proposals would be about $40 million after those other items are counted.

Board members pressed for next steps. District leaders said they will prepare talking points and coordinate a communications push, and several board members urged a "call to action" to inform parents, PTAs and community partners and to contact legislators. Board Member Erica Whitfield said the district must make the case for public schools' value as vouchers expand: "we're in a fight for, proving that we are worth it as a public school system." Vice Chair Marsha Andrews and Board Member Matthew Lane asked that the district produce messaging and engage community partners and legislative contacts quickly.

Frederick said the only item the Legislature can still change that would materially reduce the impact is the add‑on FTE calculation. She noted timeline dates for the district budget process: another board workshop on May 28, tentative budget adoption July 30 and final adoption September 10, and the district will adjust staffing on count day if actual October enrollment differs from projections.

The discussion also touched on related bills under consideration in Tallahassee, including changes to sovereign immunity limits, proposals affecting local option taxes and charter‑school facility access, start‑time bills and other items that could affect district operations or revenue.

Ending: District staff recommended monitoring the legislative process, preparing outreach and talking points for board members, and continuing budget realignment work in light of the scenario Frederick laid out. The board instructed staff to coordinate communications and to return with updates as the Legislature acts.