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Finance committee warned $6 million may be held on city balance sheet, forcing FY27 cuts
Summary
CFO presented April financials showing the district in deficit and outlined a scenario where $6 million of municipal aid could remain on the city's balance sheet; committee members said that outcome would force the district to present a FY27 budget about $6 million smaller and could require cuts equivalent to roughly 71 full-time positions.
The New Haven School District’s Finance and Operations Committee was told that the district faces a possible $6 million shortfall if the city keeps part of the mayor’s proposed supplemental municipal aid on its balance sheet rather than placing it in the Board of Education budget.
"We have already kind of crossed that red line of having any funds available based on the budget into the deficit side of the financials," Mr. Hernandez, the district’s chief financial officer, said as he reviewed the April financial report showing the general fund moving into a deficit and special funds down about $31 million year over year.
The warning followed recent state and municipal budget moves: the mayor announced $13.9 million in additional funding for the Board, of which $7.6 million is state supplemental aid that would pass through the city to the Board. The mayor proposed the remaining $6.3 million come from municipal aid. Finance-committee discussions reported in the aldermen’s finance committee would instead place about $6 million on a city balance-sheet account and release it to the Board only on request.
"If they determine that they are going to keep the $6 million on the balance sheet and not give it to us in the manner that I understand the mayor proposed, it will force BOE to propose a budget that is minus $6 million," Mr. Hernandez said. He added the district would then have to identify $6 million in cuts to present a balanced FY27 budget.
Superintendent Dr. Negro said that, in practical terms, losing that funding would threaten core services. "I would say it would be used to protect about 71 full‑time employees inside of providing core instruction to our kids," Dr. Negro said, explaining what the $6 million would cover in staffing terms.
Committee members urged continued outreach to city leaders and the state delegation, and discussed whether the city could treat the funds as a restricted special fund in the district accounting system so charges could be assigned while the money remained under city control. Board members also pressed for clearer written commitments if the city intends the aid to be one‑time and restricted for education purposes.
The committee did not take a final vote on the budget. District staff said they are monitoring the aldermen’s process; the Board expects to present a balanced FY27 budget at a full-board meeting in June and noted that any delay could require additional special meetings to finalize appropriations before July 1.
What’s next: district staff and the superintendent said they will continue discussions with city officials and state legislators this week to clarify whether the $6 million will be included in the Board’s FY27 budget or held on the city’s balance sheet and released later.
