Orange County Schools keeps spending tight as state budget remains unsigned
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Summary
District staff told the board the state has no approved budget, leaving schools to operate under continuation funding; administrators said salaries and benefits take 68% of local funds and flagged a roughly $200,000 shortfall and a drop to 6,733 funded students in FY27.
Orange County Schools — Operating under continued uncertainty at the state level, district leaders told the school board that they will keep a conservative approach to the operating budget while awaiting action in Raleigh.
"North Carolina is the only state in the nation without an approved budget at this time," Dr. Jones said, explaining that the district is operating on continuation funding that preserves prior-year levels while limiting new spending. She said the district's approved local operating budget for FY26 stood at $46,800,000 and that staff salaries and benefits account for roughly 68% of local expenditures.
Why it matters: continuation funding preserves prior authorizations but does not reflect inflation or new costs, Dr. Jones said. The district is forecasting a budget shortfall of about $200,000 this year and expects to be funded for 6,733 students in FY27 — 182 fewer than the current year — a decline that will reduce state and local funding tied to per-pupil counts.
Board members pressed for details on the financial implications. A board member asked whether mandated step increases for certified staff were funded by the state; Dr. Jones said the General Assembly authorized step increases but did not provide the accompanying funding, leaving the district to self-fund the difference. "I can get that for you," she said when asked for a dollar estimate.
Administrators also stressed a legal distinction that shapes local choices: operating and capital funds are separate by law and cannot be interchanged. "That means we cannot take any of our capital funds provided from the bonds and taxes to implement pay increases for our staff," Dr. Jones said, noting that capital projects such as roofs or new construction are funded from different sources than salaries.
A board member praised staff for working within constraints. "Thank you for really working within the budget that we have," one board member said.
Next steps: Board members said the operating budget will be the focus of the next meeting, when staff will present additional detail. Administrators said the district will continue conservative spending and provide follow-up numbers on step-increase costs and contingency options pending state or county actions.