Washoe County School District projects $9.7 million shortfall; trustees direct budget and audit analyses

At a Feb. 25 work session the Washoe County School District Board of Trustees heard a briefing from Chief Financial Officer Mark Mathers and Budget Director Jeff Bozzo on the governor's amended biennial budget and the district's preliminary fiscal-year 2025–26 outlook, and voted to send two analyses back to staff.

The board directed the superintendent to (1) analyze and report back on new items related to the FY2025–26 budget and (2) conduct a fiscal analysis of the internal audit department's staffing needs. Both motions passed unanimously by voice vote.

District staff warned the board the governor's amended budget leaves the State Education Fund largely flat for K–12 operating dollars while shifting and reclassifying some compensation funding. “We are looking at a preliminary general fund deficit of $9,700,000,” Budget Director Jeff Bozzo told trustees during the presentation.

Why it matters: most operating dollars the district receives are enrollment-driven. Bozzo and CFO Mark Mathers said the amended documents show Washoe County School District's adjusted base per-pupil funding would be essentially unchanged in fiscal 2026 and rise by less than 1% in fiscal 2027. At the same time the district faces a projected enrollment decline and rising non-discretionary costs.

Key details

- Per-pupil funding: Staff said Washoe currently receives $9,705 per student in FY25; the governor's amendments show a $0 increase to the per-pupil amount for FY26 and a modest increase in FY27. The presentation said statewide adjusted base per-pupil funding decreases about 1% in year one of the biennium and rebounds less than 1% in year two.

- Enrollment and revenue impact: Staff reported a projected enrollment decline of “a little bit more than a thousand students,” which the district estimates will reduce revenues by about $10 million for FY26. Trustees and staff noted some offset is possible because fewer students generally reduce staffing needs, but that offset will not fully cover the projected revenue loss.

- SB 231 and compensation funding: The presentation described SB 231 as a funding vehicle for statewide compensation changes that, in effect, shifts some spending between the State General Fund and the State Education Fund. Washoe's SB 231 allocation was reported as steady at $19.3 million per year in the governor's amendment; staff said that flat amount buys a smaller percentage COLA as base salaries increase.

- Weighted funding volatility: Trustees heard that at‑risk weighted funding has been volatile; statewide at-risk funding fell and then partially rebounded under the amended budget. Staff said that volatility complicates long-term planning for supports targeted at higher‑need students.

- Special education: The governor's amendment included increased local special education funding to help cover already‑incurred district special‑education costs. Staff described that increase as a “bright spot” that eases pressure on the general fund in the near term but does not address future growth.

- Preliminary general fund picture: District staff showed projected revenue increases of about $18.8 million (driven largely by special-education adjustments and a small uptick in local revenues) versus known expenditure increases of roughly $28.5 million, producing the cited $9.7 million preliminary deficit. Known expenditure pressures cited included step increases, PERS and health insurance cost increases, and added special‑education staffing tied to growing IEP caseloads.

Trustee direction and board actions

- Internal audit analysis: President Smith moved that the board direct the superintendent to conduct a fiscal analysis of the internal audit department’s needs in partnership with the chief internal auditor. “Chief internal auditor Starkey is asking potentially for another position, but he would like to do a fiscal analysis of his team in partnership with senior staff,” President Smith said when she introduced the motion. Trustee Westlake seconded; the board approved the motion 6–0.

- Budget analysis direction: The board also voted to direct the superintendent to analyze and report back to the board new items related to the FY2025–26 budget. The motion was seconded by Trustee Diane Nicolette and carried by voice vote 6–0.

What staff will do next

District leaders told trustees they will continue running options and “financial reengineering” ideas and will return with recommendations after March as more information becomes available from the legislature and the state’s economic forum. Bozzo and Mathers said they will also engage in legislative outreach to explain the local effects of the state budget.

Public comment

One public commenter, Pablo Nava Duran, urged attention to elective offerings at specific high schools and signatures programs, and raised school‑level concerns; his remarks were recorded during the public comment period on the budget item.

The board’s next steps include staff analysis of reallocation options, any recommended cost‑savings measures or investments, and follow‑up reports on how the governor's budget revisions affect Washoe’s final FY26 proposal.