Wake County budget committee warns of staffing risk after federal grant losses and funding uncertainty

The Wake County Public School System Budget & Finance Committee on Oct. 28 heard that two competitive federal grants were terminated earlier this year and that continuing uncertainty about state and federal funding could affect staffing for the 2025–26 operating budget.

"It was almost a $12,000,000 grant over a 3 year period, and and it was explicitly to be used for recruiting high quality teachers at our high need schools," said David Nader, a staff member who presented the budget update. He told the committee the district appealed the decision but was unsuccessful. Staff also said a school‑based mental‑health grant worth just over $14,000,000 over five years was terminated after an appeal that did not succeed.

Why it matters: federal funding makes up roughly 8% of the district’s proposed operating budget for the year — just under $180 million — and 83% of the operating budget pays personnel. Committee members repeatedly noted that any sizable reduction in external funding would have direct implications for staffing.

Nader summarized recent state and federal developments. At the state level, the legislature and governor enacted a limited package (House Bill 125 signed Aug. 6) that authorizes a step increase for some certified staff but does not provide broad compensation increases for other employee groups. At the federal level, Nader said the U.S. Department of Education briefly froze Title II, III and IV formula funds at the start of the fiscal year; multiple states and attorneys general filed suit and the administration began a staggered release of those funds (partial release July 18; fuller release July 25). The district ultimately received the formula (Title) funds for the current year.

Staff described how the district’s magnet grant funding was affected by an Office for Civil Rights review. The Nexus magnet grant distribution remained pending while other districts received their funds; staff said the grant was released and Wake County received those funds on Sept. 29.

Board members asked for specifics about how grants and potential future cuts would affect magnet schools and school staffing. "I am terrified about the budget next year for a variety of reasons," said Miss Evans, a committee member, pointing to state revenue forecasts that show declining state receipts and warning that county or state back‑fills are not guaranteed. Staff said they have not implemented school‑level cuts in special education positions and that any reduction in force would require board approval.

Nader described ongoing planning: staff have met with principals and academic leadership to review allotment formulas and to develop options for reallocating current resources or identifying reductions if revenues decline. He said the administration will bring recommendations to reconcile the board’s proposed budget with a final adopted budget to the committee on Nov. 4 and will ask the full board to consider adoption roughly two weeks later.

Action on minutes: the committee approved the Aug. 26 meeting minutes on a voice motion. Miss Rice moved to approve the minutes and Dr. Ring seconded; the motion concluded with an "Aye" voice vote and no opposition recorded.

The committee did not adopt any budget changes at the Oct. 28 meeting; staff emphasized that recommendations for the current fiscal year reconciliation will be provided on Nov. 4 and that the district will continue to monitor state and federal developments.

Provenance: staff described the two terminated competitive grants and the Title funds freeze during the budget presentation and Q&A (transcript beginning at 09:05 and continuing through the magnet grant discussion), and the Nov. 4 next steps were announced later in the presentation.