Committee recommends approval of $78.17 million Salem Public Schools FY26 budget after hearing on cuts, enrollment and rising costs

On May 27, 2025, the City of Salem Administration & Finance Committee (convened as a Committee of the Whole) voted to recommend approval of the Salem Public Schools fiscal year 2026 operating budget in the amount of $78,173,061.

The recommendation follows presentations by district leaders who described a 4.8% overall increase in the school budget from FY25 and outlined drivers of the gap, including a recent educator contract, rising utilities and transportation costs, and the expiration of federal pandemic funds. “This has been a challenging budget year for the school district,” the superintendent said, noting a larger contract settlement to make teacher pay more competitive.

The committee was told the $78,173,061 figure reflects the school committee’s final proposed appropriation. Assistant superintendent/finance staff explained the district faces a roughly $4.9 million gap that was closed in large part by proposed reductions and offsets: 57 position reductions (many from vacancies or anticipated retirements), nonpersonnel cuts, and planned use of recurring revenue, grants and prepayments to close an $825,000 remaining difference before final appropriation.

District finance staff provided enrollment and cost context: the district’s official October enrollment was presented as 3,958 students (about a 2% increase), multilingual learners numbered approximately 768 (about one in five students) and 942 students were reported in special education programs (about one in four). Officials said 76% of the budget is personnel costs and 24% is nonpersonnel. The presentation highlighted investments the district sought to preserve, including class-size protections, prekindergarten, early college and career-technical education pathways, increased stipends for athletic coaches and expanded media/digital library services in most schools.

Officials described a range of cost pressures: electricity rates the district expects to rise (finance staff cited an anticipated ~30% increase in FY26 after earlier contract terms expired), natural gas increases of about 10%, higher out-of-district tuition for students with intensive special-education needs, and sharply higher costs for homeless student transportation. Finance staff contrasted a FY25 homeless-transportation budget of roughly $800,000 with an anticipated cost “north of $1,300,000” this year. The district reported it had invested over $1 million in building energy-efficiency measures to reduce future utility costs.

On state funding, the presentation estimated an increase in Chapter 70 aid of about $1.3 million under the then-available house numbers; staff noted final state allocations could change as the Legislature finalizes its budget. Officials also said they were relying on recurring revenue sources (Circuit Breaker special-education reimbursement, school choice and rental income) and planned prepayment strategies to balance the recommended appropriation, and they warned that loss of federal funds could change the outlook.

Discussion at the meeting included councilors’ questions on energy choices (including a suggestion to pursue heat pumps instead of replacement fossil-fuel boilers), the scale and location of position reductions, facility consolidation planning, and transportation procurement timelines. The superintendent and finance staff said the district had tried to limit classroom impacts and that many of the 57 reductions were vacancies or retirements; they also said the school committee had asked staff to review building leases and utilization at an upcoming retreat.

Councilor Stott moved that the committee recommend approval of the Salem Public Schools appropriation for FY26 in the amount of $78,173,061; Councilor Harvey seconded. The motion carried unanimously (recorded as four hands in favor at the committee meeting). The committee’s recommendation will be reported to the City Council; staff said the school budget vote by the full council was expected on June 12, 2025.

The district and councilors noted several follow-up items: more detailed lists of position reductions are in pages 29–30 of the district budget book; a school-committee retreat is scheduled for June 21 to examine building utilization and lease data; and the capital-improvement requests tied to the schools will be discussed separately and return to the council for vote on June 11.