Washoe County Schools see $9.7 million preliminary general fund shortfall; board asks staff for further analysis

Washoe County School District finance officials told the Board of Trustees on Feb. 25 that the district faces a preliminary general fund deficit of $9,700,000 for fiscal year 2025-26 and directed the superintendent to analyze potential responses.

The board requested the analysis after a budget presentation from Mark Mathers, chief financial officer, and Jeff Bozzo, budget director. Bozzo summarized the district27s estimate: "our preliminary general fund estimate, if we take the known revenue changes and our known expenditure changes, we're looking at a preliminary general fund deficit of 9,700,000." The board approved a motion directing the superintendent to analyze and report back; the motion passed (motion moved by Trustee Diane Nicolette, seconded; tally stated in meeting: 6 to 0 when taken).

The nut graf: Trustees were shown how a mix of flat state per-pupil funding, a projected enrollment decline and known expenditure increases combine to create the shortfall and were asked to weigh possible reallocations, program adjustments and other options before finalizing budget decisions later in the spring.

Bozzo and Mathers framed the district27s estimate around the governor27s amended biennial budget and the state27s People-Centered Funding Plan. Key figures presented by staff include: - Adjusted base per pupil: Washoe27s per-pupil amount is projected to remain flat at $9,705 in fiscal year 2026 and rise by about $71 in fiscal year 2027. - SB 231 (compensation) allocation to Washoe: $19,300,000 per year (unchanged in the proposed budget); staff warned the fixed dollar amount will buy a smaller percentage COLA over time as local base wages rise. - Enrollment decline: the district27s demographer projects a decline of "a little bit more than a thousand students," which staff estimated as roughly $10,000,000 in reduced revenue. - Weighted/at-risk funding: district at-risk funding fell from about $15,000,000 (FY24) to roughly $10,000,000 (FY25) and was shown in the governor27s proposed amendments to increase by about $4,000,000 in FY26; staff said the at-risk calculation lacked transparency and remains volatile.

On the revenue and expenditure side, Bozzo reported that total general fund revenues are projected to increase by $18,800,000 (largely reflecting higher local revenues and a special education funding increase), while known expenditure increases total about $28,500,000. Specific cost drivers cited included negotiated step increases and cost-of-living adjustments ($12,300,000), increased special education staffing ($4,700,000), contract and insurance increases, concurrent-enrollment cost increases, and a required contingency top-up of about $200,000. Bozzo also noted that shifting enrollment results in a $9,900,000 revenue decline but only about $2,500,000 in staffing reductions from enrollment-based positions, leaving a gap.

Trustees and staff discussed the limited feedback loop between districts and the state budget process, with Mathers noting state law limits pre-filing exchanges and that some budget details were only available after late filings from the governor27s office. Board members urged continued legislative advocacy and asked staff for options to close the gap that would balance priorities and the need to maintain a structurally balanced general fund.

Actions and next steps: the board moved and approved a directive that the superintendent analyze and report back on new items related to the FY25-26 budget. Staff said a fuller set of recommendations and options will come after March, but cautioned that the district may need to reallocate existing resources or pause proposed new investments unless the state provides additional relief.

Ending: Trustees said they wanted careful, data-driven options brought forward rather than immediate cuts; staff reiterated it would propose reallocation ideas, program reviews and other measures in subsequent meetings as numbers and legislative outcomes become clearer.