Orange County school districts warn of enrollment-driven budget gap as they seek raises and program funding

Orange County Schools Superintendent Danielle Jones and Chapel HillCarrboro City Schools Superintendent Rodney Trice told the Orange County Board of Commissioners and both local school boards on April 30 that enrollment declines and rising costs are squeezing school budgets and forcing difficult tradeoffs.

"Our shared commitment guides every decision the district makes and keeps the needs of children at the center of our work," OCS Superintendent Danielle Jones said as she opened her districts presentation, which highlighted student-growth gains alongside fiscal constraints. OCS Chief Finance Officer Rhonda Rath reported that for the 202425 school year 100% of OCS schools met or exceeded growth, grade-level proficiency rose to 58.4%, and the four-year cohort graduation rate increased eight percentage points.

Those performance gains come as OCS said its FY2027 state funding will be calculated on 6,733 students—down 182 from the prior year—and that the district faces roughly a $1.7 million state funding loss tied to enrollment decline, equivalent to about 14.5 positions if not offset. Rath said federal funding is decreasing and state funding is not keeping pace; over the past four years OCS shifted more than $1 million in local funds to mental-health, exceptional-children, and limited-English-proficiency services.

On staffing and compensation, Rath presented a continuation budget of approximately $48.8 million that includes a 4% salary increase and projected increases in retirement and employer hospitalization costs. She said certified supplement levels (currently 12%18%) lag surrounding districts and that a 3% per-tier increase to certified supplements would cost about $1.3 million; a proposed 9% supplement uplift for classified staff would cost roughly $300,000. Rath also proposed raising bus-driver hourly pay to match Chapel Hill-Carrboro City Schools at an estimated $305,000 to enable shared driver pools between districts.

"We understand the reality of the financial environment," Rath said, warning that an unfunded state mandate to provide a step increase for certified staff required drawing about $700,000 from OCS reserves this year and that the districts $5.5 million audited fund balance provides limited cushion given monthly operating expenditures of about $3.4$3.5 million.

Chapel Hill-Carrboro CFO Jonathon Scott (recorded in the presentation as both Jonathan and Jonathon Scott) told the joint meeting that CHCCSs average daily membership came in at about 10,773 this year, a ~350-student drop, resulting in a budget enrollment projection of 10,741 (a decrease of 277). Scott said the district plans conservatively amid continued state budget uncertainty and presented a continuation plan that assumes a 4% salary increase, a 6% increase in state retirement contributions, and higher health-insurance costs. He estimated a continuation need of roughly $3.1 million after accounting for special-district-tax growth and a potential 3% county appropriation increase.

Scott also outlined CHCCS expansion priorities: a proposed 3% increase in certified supplements (estimated ~$1.65 million including benefits), a 3% increase in classified supplements (~$1.05 million), and a proposal for a $1 million recurring curriculum-investment fund to address declining state textbook funding.

Both districts cited CTE and dual-enrollment partnerships as bright spots. OCS reported more than 1,100 industry-recognized credentials earned last year and said CTE concentrators graduate at about a 95% rate; CHCCS said it offers over 105 CTE courses and reported tripling participation in a Durham Tech dual-enrollment partnership this year.

Board members thanked district leaders for the presentations and acknowledged the tension between improved student outcomes and shrinking enrollment. Commissioner Earl McKee said academic gains could help mitigate charter-school losses by improving public perception, while Commissioner Marilyn Carter and others commended CTE and mental-health efforts tied to attendance.

What happens next: county staff will bring the County Managers recommended operating budget on May 5; public hearings are set for May 12 and May 28, with work sessions through June and a planned budget adoption on June 16. The districts urged commissioners to consider the districtslong-term facility and program needs when weighing local funding choices.

Officials quoted in this article: Danielle Jones, Superintendent, Orange County Schools; Rhonda Rath, Chief Finance Officer, Orange County Schools; Rodney Trice, Superintendent, Chapel Hill-Carrboro City Schools; Jonathon Scott, Chief Financial Officer, Chapel Hill-Carrboro City Schools.

The boards did not take any formal vote during the joint meeting; both districts presented continuation and expansion budget requests for commissioners to review during the county budget process.