February 24, 2026 Staff & Community Update: FY 2027 Operating Budget—Board Work Session #2
Fiscal Year 2027 Proposed Operating Budget
Budget Facts and Frequently Asked Questions (FAQs)
As the Board of Education prepares to vote on the proposed Fiscal Year (FY) 2027 Operating Budget this evening, we want to ensure our community has clear and accurate information. We know there is misinformation circulating, and this FAQ is intended to provide straightforward explanations of the fiscal realities and key considerations driving the FY27 proposal.
To learn more, please rely on BCPS’ official budget information sources, including Budget 101 and the Operating Budget webpage, where all current materials and updates are available.
- How is the majority of the BCPS operating budget spent?
Staff compensation and benefits- $0.82 of every dollar in BCPS is spent on staff.
- What are compensation costs for FY27?
Total compensation costs to support the bargaining agreements are $93.1 M. Total salary and benefits cost including Non-FTE salaries is $112.7M.
- If we are receiving additional funding from state and federal sources, why is there a budget gap?
The planned increases in revenue do not keep up with the increased costs of compensation. Additionally, enrollment declines have a negative impact on revenue from federal, state, and local funding sources.
- Why are we considering increases to staffing allocation formulas that will impact class sizes?
Proposed changes to staffing allocation formulas are a last resort. With increasing costs and declining enrollment, BCPS has had to consider difficult decisions to bridge the funding gap. For the past two years, the school system reductions of $168.9 million have largely stayed away from schools.
- There are different class sizes across schools – how does that happen with a standard formula for allocations and what are the expectations for next year?
Master schedule decisions at the local school level drive class sizes – small and large. The addition of strict guidance for master schedules and class caps should help to mitigate the impact and ensure reasonable class sizes. Additional school specific information can be found on the school dashboard. Public School Profile | Tableau Public
- The budget includes several salaries for staff members that appear higher than the negotiated agreements. How is this possible in these difficult fiscal times?
Budgeted compensation increases for staff are aligned with the compensation agreements for year 2 and 3 for all positions in the budget. Average salary cannot be derived by dividing salaries by FTE’s (full time equivalents). This category includes all non-FTE salary expenses as mandated by COMAR.
- What is fund balance and how is it used?
Fund balance is the district’s year-over-year cumulative net savings – what’s left after all revenue is received, and the bills are paid. These funds protect schools from financial shocks and bad timing.
Fund balance = the money left over after you pay all your bills for the year.
More plainly:
- You start the year with some money
- You collect revenue (state aid, local funding, grants, etc.)
- You pay expenses (salaries, buses, books, utilities)
- Whatever is left = gets added to fund balance
Why it matters (in real-life terms):
- It’s your rainy-day cushion for emergencies or unexpected costs
- It helps stabilize budgets when revenue dips or costs spike
- It protects you from having to make sudden cuts mid-year
- It can improve your financial credibility with auditors and bond rating agencies
What it’s not:
- It’s not extra money to casually spend
- It’s not hoarding – it’s responsible financial management
- It’s not a secret stash; it’s publicly reported and governed by policy
- Why does BCPS propose increasing the use of fund balance for FY27? What is the plan for the out-years?
Compensation costs in FY27 create a budget gap. To close it, the school system will cut spending, save on contracts, use grants, reduce positions, and use more of the fund balance. During the FY26 budget process, some County Council members strongly encouraged greater use of the fund balance. However, using $50 million each year would quickly deplete the fund balance. That is why there is a plan to gradually reduce and stabilize its use over the next three years, so the budget can rely more on steady, ongoing revenue instead of one-time funds.
- What is salary turnover and how is it related to the fund balance?
“Increasing salary turnover” and “using more of the fund balance” are basically the same move – spending savings to cover ongoing costs.
Here’s why:
- Salary turnover savings come from temporary vacancies or newer hires being paid less. That money isn’t new revenue – it’s just short-term savings.
- When you plan to rely on more turnover, you’re assuming you’ll keep having empty positions or lower-paid staff. That’s not a strategy – that’s a timing difference.
- Fund balance is the system’s savings account.
- Using turnover to pay for ongoing expenses is really just another way of saying, “We’re dipping into savings to cover the gap this year.”
Bottom line: Whether you call it “higher salary turnover” or “using more fund balance,” you’re still covering recurring costs with one-time money.
- Why can’t you just eliminate some teams and departments to close the budget gap?
99 percent of the BCPS workforce is represented by a negotiated master agreement. Agreements do not allow for layoffs and furloughs. Represented employees are entitled to a vacant position in the system that matches their qualifications and experience.
- Is central office growing in BCPS?
No, central office administration is not increasing. The FY25 and FY26 operating budgets included significant reductions to central office positions. Of those reductions, 69 were supervisory-level positions, and more than 80 percent of the eliminated positions were filled at the time. The proposed FY27 budget includes 36 additional position reductions.
Recent data from Georgetown University’s Edunomics Lab incorrectly categorizes BCPS staffing information, attributing some school-based positions to central office. BCPS is working with Georgetown University directly to provide corrections and ensure the data reflects accurate, up-to-date staffing information.
