Salt Lake City School District previews 2025–26 budget; officials warn special education and nutrition funds remain strained

Business Administrator Alan Kearsley told the Salt Lake City School Board on May 6 that the district’s proposed 2025–26 operating budget assumes no property tax increase and balances a modest increase in state-funded per-pupil revenue with reductions elsewhere in the state funding formula.

Kearsley said the legislature set the Weighted Pupil Unit (WPU) increase at 4% for next year, but changes to the state funding formula moved money previously allocated for advanced-degreed professional staff into a discretionary pot the district will not receive. “What that means for the Salt Lake City School District is we will receive a $1,500,000 decrease in those fundings for the district,” Kearsley said.

Kearsley framed the proposed general fund as a cautious budget: it includes step-and-lane salary increases and a cost‑of‑living allowance, a 10% rise in health-insurance costs and an ongoing effort to absorb special-education costs that continue to exceed state and federal revenues. “Special-education expenditures continue to exceed the state and federal special-education revenue by millions of dollars,” he said, adding the proposed budget shifts an additional $1 million from the minimum-school program to special education to help cover the gap.

Why it matters: The district’s general fund forms the core of classroom spending. Kearsley said roughly 55% of the proposed $290 million general fund would go to instruction; 90.6% of general-fund spending is salaries and benefits. With personnel accounting for the majority of expenditures, he said, the district’s flexibility to cut spending without affecting employees is limited.

Key details from the presentation

- Revenue assumptions: the district intends to apply the certified tax rate (no local tax increase). The state’s 4% WPU increase should bring more WPU revenue but the reallocation of the professional‑staff cost formula reduces the district’s net funds by about $1.5 million, Kearsley said. - Personnel and benefits: the proposed budget includes step-and-lane salary increases and a COLA; health and accident insurance premiums are budgeted to rise by 10%. - Special education: district leaders said they will again use district minimum-school funds to cover special-education shortfalls and plan an additional $1 million transfer to help cover ongoing costs. - Fund balance treatments: state law requires showing an unassigned fund‑balance line of $0 in the budget; Kearsley said the district still retains assigned/reserved balances, including a statutorily capped economic stabilization reserve not to exceed 5% of the general fund. - Expenditure mix: instruction makes up the largest share (about 55%), with operations and maintenance around 10% and support services for students and instructional staff making up most of the remainder.

Special revenue funds highlighted

Kearsley summarized several special‑revenue funds and cautionary items:

- Child Nutrition: Revenues come from meal sales and federal/state reimbursements; meal prices have not increased in over a decade. He warned that food cost inflation and reduced federal pandemic-era aid have left the Child Nutrition Fund on a trajectory where expenditures exceed revenues. “There is still some fund balance available, so it’s not crisis mode yet, but we need to change that trajectory,” he said. He noted about 44.5% of child-nutrition expenditures go to purchasing food, with salaries and benefits the second-largest share.

- Student activities: Funded by fees, fundraising and gate receipts; the district maintains a small reserve for uneven years.

- Pass-through taxes: Kearsley reminded the board that some property-tax dollars are incrementally diverted to redevelopment/tax‑increment projects and to charter-school local replacement funds; such pass-throughs reduce the share of property-tax revenue available in the general fund.

Board questions and clarifications

Board members pressed for clarity on a range of items: why salary totals did not drop sharply despite consolidation and school closures (Kearsley explained salary increases outpaced the effect of reduced FTE); what would happen to food programs if federal reimbursements were cut (Kearsley said some programs would likely be eliminated if federal funding were lost); and whether school-based student-activity fee systems and online payment platforms will be improved (Kearsley said a new platform is planned for July 1).

Kearsley also offered process notes: the full budget book will be distributed ahead of the May 20 meeting; a public budget hearing is scheduled for June 3, when the board will adopt the final 2025 tax rate (the district plans to use the certified rate).

What’s next

Kearsley invited board members to request one-on-one budget briefings in the coming days. The board will receive the final budget book May 20, hold a public hearing June 3 and act on the FY 2025–26 budget and certified tax rate at the end of the public process.

Ending note: Kearsley told the board the district is using conservative revenue estimates so the board is more likely to see favorable rather than unfavorable surprises when actuals are reported later in the year.