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Franklin‑McKinley budget presentation warns of $11 million ongoing gap, special‑education costs cited
Summary
District budget staff said the district faces an $11 million ongoing shortfall and multiyear projections show reserves falling to zero by 2027–28 without further cuts or new revenue; special education costs were highlighted as a major driver.
At a public hearing on the 2025–26 budget, Chief Business Officer Jason presented a multiyear projection showing persistent deficits that could push unrestricted reserves negative by the 2027–28 fiscal year unless the district secures new revenue or makes further cuts.
Jason outlined difficult decisions already made in the prior year, including closing three schools, furloughs and layoffs, and said federal ESSER funds are exhausted. He told the board that, based on current assumptions, the district needs to identify about $11,000,000 in ongoing reductions by March 2026 to produce a balanced multiyear projection.
The presentation called out special education as a major cost driver: projected special education expenditures are about $27,000,000 for the coming year, up from earlier projections. Jason said increases reflect both higher numbers of special education students and rising costs for services, including third‑party placements and higher retirement contribution rates.
Board members asked for more detailed breakdowns. Board Member Bernardo Rodriguez requested a future board presentation on special education demographics and cost drivers; the business office agreed this analysis can be provided. Multiple trustees emphasized the need to explore potential revenue options (including long‑term leases of closed sites and the possibility of a new parcel tax) and to present a written timeline for next steps.
Jason reminded trustees that the district must adopt a preliminary budget before the state finalizes its budget and that a 45‑day budget revision could follow after the state numbers are available. He said some May revise items (TK funding changes, a discretionary block grant, and other proposals) could improve the district's outlook but had not been included in the initial assumptions.
Board Member Hong described the situation as a "structural deficit" and urged broad community engagement to prioritize values and choices. The district will return an updated multiyear projection and proposed options at a subsequent meeting.
