PGCPS faces fiscal squeeze: officials propose hiring freeze and $150 million in cuts for FY2027

Prince George’s County Public Schools faces a narrow revenue outlook for fiscal 2027 and plans a multi-phase budget process that begins with immediate spending controls, Chief Financial Officer Lisa Howell told the board on Nov. 13.

Howell reviewed fiscal-year 2025 closeout figures: PGCPS began FY25 with roughly $374 million in fund balance and ended with about $217 million, a roughly 42% decrease tied to planned multi‑year grant spenddowns and prior planned drawdown. Of the ending balance, Howell said roughly $175 million is assigned (of which $95 million is already reflected in the FY26 budget as a funding source and about $80 million has been reserved for future obligations), leaving another $36 million in remaining fund balance.

Looking ahead, Howell identified several revenue pressures: preliminary enrollment counts are flat overall but show declines in multilingual learners, students with disabilities and prekindergarten that affect state aid; Maryland’s per‑pupil amounts in the Blueprint legislation change some lines (compensatory education is falling while special education and pre‑K PPA are increasing); the state has signaled a roughly $1.5 billion budget shortfall and the county projects a nearly $92 million deficit for FY27, all of which could constrain local school funding.

To mitigate risk, district leaders said they have implemented an immediate hiring freeze for central office positions and targeted discretionary cuts (nonlocal travel, conferences, catering and some central office discretionary spending) while protecting instructional supply budgets and field trips. Howell said the district is planning a $150 million base-budget reduction target for FY27, driven by an estimated $92 million impact of negotiated compensation increases and reduced salary-lapse assumptions plus other required obligations and fringe costs.

Board members pressed staff on whether school‑level instructional budgets were protected; Howell and other administrators said instructional supplies were not part of the targeted cuts and an exception process exists so schools can request restorations when necessary. Members also requested deeper ROI and program‑level analyses before final decisions.

Why it matters: A $150 million reset in a district of this size will affect school and central budgets, program funding and staffing decisions and will require public engagement and board deliberation during the budget cycle.

What’s next: The district will continue its three‑phase budget process with public hearings and work sessions; staff promised periodic budget updates, an updated revenue assumption after the governor’s budget release, and additional community engagement before finalizing the FY27 proposed budget.