Cincinnati — Cincinnati Public Schools administrators said Oct. 11 they will set a $634,200,000 general-fund budget target for fiscal year 2026 and cautioned the board that expected reductions in federal grants will tighten the district’s overall resources.

Superintendent Susan Bennett Murphy and Treasurer Dustin Augustine briefed the board at a retreat on the district’s forecast and the work that must be done between now and next June to balance priorities with available money.

District staff said $634.2 million is about $500,000 less than the final general fund this year. “We’re looking at setting the budget target to start for next year at $634,200,000,” Treasurer Dustin Augustine told the board, noting the number derives from the forecast the board approved earlier the week of the retreat.

Why it matters: CPS leaders said the target is a starting point, not a final budget. The district faces inflationary cost increases, step and negotiated contract reopeners coming in November, the return of deferred technology lease payments and the need to begin building cash reserves to protect its bond rating. At the same time administrators said some federal revenue streams they counted on in prior years are at risk, shrinking the pool of money planners can rely on.

Federal-grant outlook: District officials told the board their federal-projection team had modeled a range of outcomes and settled, for planning purposes, on assumptions that include receiving roughly 90% of prior Title I allocations and a possible elimination of Title III (funds for English learners), while Title II and Title IV are modeled at 90% each. Leaders noted those assumptions could be optimistic if Washington or Ohio reduce allocations. The district also emphasized it has spent federal carryover in recent years (including ESSER funds) and will not have the same one-time balances to rely on for FY26.

Reserves and ratings: Augustine reiterated that CPS has a board-adopted cash‑balance policy and that rating agencies have viewed that favorably. “One of the rating agencies were very pleased that we had a policy in place,” he said, adding the district should budget a contribution to reserves so it can preserve future bonding capacity for building and maintenance projects.

Next steps: The treasurer and superintendent said the district will pursue a holistic budget process this year: treating federal and non-federal funds together, assigning subteams to seek revenue generation and cost controls, and returning to the board with updated forecasts in February. Augustine and other staff emphasized the budget target will be revised as state legislative changes, federal decisions and local revenue data become clear.

Ending: Board members pressed for continued transparency and scenario planning so the public and district stakeholders understand choices if revenues fall below the current target. Administration said additional public outreach — including the district’s financial town hall series — will continue as the forecast and assumptions are refined.