City Schools outlines FY26 budget, warns $48 million federal rescission will hit FY25 programs

Baltimore City Public Schools officials presented a proposed fiscal 2026 budget Tuesday and warned an abrupt federal decision to rescind pandemic-era recovery funds will remove roughly $48 million in expected reimbursements for fiscal 2025, forcing short-term cuts while leaders said they will protect next year's planned investments.

The budget preview, delivered by Chief Financial Officer Chris Doherty, Chief Academic Officer Joan Dabrowski and other senior staff, proposed a general fund of about $1.5 billion and highlighted roughly a 6% year-over-year increase in the general fund for FY26 (about $96 million), not including a separate $22 million the district expects from late actions in the General Assembly. CEO Dr. Sonja Brookins Santelises said the district will not receive "approximately $48,000,000 in reimbursement for funds already spent or contractually committed," and that the loss has already affected services in some schools.

The presentation explained that revenue for City Schools remains concentrated in state funding (near 70% of general fund revenues), with the city providing most of the local share. Doherty told the board that the district developed FY26 budgets without assuming the late-night changes from Annapolis, saying, "We made the prudent decision not to estimate what we thought would happen at late at night in the General Assembly" so schools would not have funds pulled back if state numbers changed.

Why it matters: school leaders, principals and families face immediate program disruptions because the federal rescission affects money already spent or contractually committed in FY25, while FY26 planning continues and the board will consider an adopted FY26 budget in May. The district described a multiweek review process before the May vote intended to give stakeholders time to examine school-by-school allocations.

Most important details

- The district plans to release the draft budget book on April 11, with a public review period through May 13 and a board vote scheduled for May 13. - For FY26 the district reported a roughly 6% increase in the general fund; with the $22 million the state added late in Annapolis the increase would be closer to 7'percent for Baltimore City. - The district said the federal rescission removes roughly $48 million in expected reimbursements for FY25. As a result, some FY25 programs were paused (Chief Santelises said "Today was the last day for tutoring programs at 25 schools"). - Concentration of Poverty (CPG) grants and Title I remain major funding streams; CPG is projected at about $166 million in FY26. - The district said it will use FY25 funds and built-up fund balance options to address the rescission and avoid pulling FY26 dollars from school budgets.

What the district is prioritizing

Administrators stressed sustaining investments they said are proven: instructional coaching in literacy and math (a roughly $30 million commitment), school-based mental health (districtwide investments including nearly $50 million for mental health providers), and expanded fine arts and middle-school athletics. Chief Academic Officer Joan Dabrowski said City Schools will add one centrally funded full-time equivalent in the fine arts office to expand instrumental programs in three more schools.

Health, staffing and costs

Doherty cautioned that rising fringe and benefit costs reduce schools' purchasing power even as topline dollars grow. He said medical and pharmacy costs are up about $10 million each in the FY26 projection and that fringe rates rose sharply year over year, which increases the effective cost of each position.

Board timeline and next steps

The district will publish the full draft budget book on April 11 and hold a review and questioning period through May 13, when the board expects to adopt an FY26 budget. Doherty said school-level enrollment adjustments occur in the fall and that median additional funds per school from the recent state action are roughly $88,000, with a mean near $108,000.

Quotes

"City Schools will not receive approximately $48,000,000 in reimbursement for funds already spent or contractually committed," said Dr. Sonja Brookins Santelises, CEO of Baltimore City Public Schools.

"We made the prudent decision not to estimate what we thought would happen at late at night in the General Assembly," Chief Financial Officer Chris Doherty told the board about why school budgets were built conservatively ahead of late state action.

Ending

The board and administrators said they will use built-in fund balance and FY25 adjustments to absorb the federal rescission and avoid altering school budgets for FY26. The board will receive the draft budget book April 11 and will hold public and board review through May 13 before a final vote.

Votes at a glance

During the meeting the board approved several routine motions recorded on the public record: reopening the meeting, approval of prior open- and closed-session summaries, approval of the PEP (personnel employment and payroll) agenda, and approval of the consent agenda. Each motion was seconded and passed by voice vote; roll-call votes were recorded for each motion.