Funding Our Future: FY27 Budget Challenges
- Kelly Carmichael Booz
- Sep 25
- 4 min read
September 25, 2025
By: Kelly Carmichael Booz (District B), Vice Chair of the Strategy & Accountability Committee and liaison to the Budget Advisory Committee, and Ryan Reyna (District A), Chair of the Strategy & Accountability Committee
Note to Readers: As part of our effort to explain major topics before the School Board, similar to our redistricting updates, this post provides an update on the budget discussion that opened our first meeting of the school year. The redistricting blogs received positive community feedback for making complex decisions easier to follow, and we aim to bring that same clarity to other issues.
This fall, the School Board will launch a new website where these updates will be posted, rather than on individual board members' websites. Until then, here is a summary of the budget challenges and community conversations that are shaping the FY27 process.
Funding Our Future: Kicking Off the School Year and Budget Season
At our first School Board meeting of the year, Chair Michelle Rief shared an important reality: ACPS will need at least $19.3 million in additional revenue in Fiscal Year 2027 just to maintain our current level of services.
The $19.3 million figure reflects assumptions we believe are important to sustaining our schools, including pay raises for staff, anticipated increases in healthcare premiums, and inflationary costs such as utilities, classroom supplies, and contracted services. These are not all obligations; rather, they are priorities we want to honor to stay competitive in hiring and to support our staff and students.
The estimate does not yet include potential costs associated with enrollment growth, collective bargaining agreements currently under negotiation, or changes in federal funding. If additional revenue is not available, the School Board would need to revisit these assumptions and weigh which priorities can realistically be funded.
Taking the Conversation to the Community
Since that meeting, ACPS has hosted two Funding Our Future community sessions to expand on these points and hear directly from families, staff, and community members.
August 27, 2025, at George Washington Middle School
September 17, 2025, at the ACHS Minnie Howard campus
At these sessions, the Budget and Financial Services team walked through the budget development cycle, explained what drives ACPS costs, and shared projections for the upcoming year. The goal was not just to present numbers but to answer questions and invite community priorities into the budget conversation.
What Drives the $19.3 Million?
The presentations broke down major cost drivers for FY27, based on current projections:
Employee compensation: An annual “step increase” for staff salaries across funds totals about $8.9 million.
Market rate adjustment: A 2% cost-of-living adjustment for eligible employees adds $5.8 million to the total.
Healthcare premiums: Increases in health and dental coverage are estimated at $3.1 million.
Non-personnel inflation: Rising costs for purchased services, such as custodians, school security, supplies, and capital items, add approximately $1.5 million.
Enrollment and Comparisons
The team also shared that ACPS enrollment is projected to remain steady, with a total of around 16,700 students through FY28.
On a per-pupil basis, Alexandria’s local contribution for FY26 is estimated at $16,964 per student. This figure aligns with that of neighboring jurisdictions, including Fairfax and Loudoun, while being significantly lower than those of Arlington County and Falls Church City.
It’s important to note that these comparisons do not reflect differences in student populations or the Local Composite Index (LCI), the formula the state uses to determine how much each locality is expected to contribute based on property value. For example, Alexandria City, Falls Church City, and Arlington County each have an LCI of 0.80, which means the state expects them to shoulder a larger share of local education costs. Fairfax (0.66) and Loudoun (0.55) contribute less locally under this formula.
Why It Matters
Chair Rief highlighted that sharing these numbers early is about transparency and planning together. By putting estimates on the table now, we aim to establish a shared framework that enables both the community and the City Council to better understand the requirements for sustaining services year over year. This will allow us to make the budget process as smooth and collaborative as possible.
What’s Next
The School Board will hold a budget work session on September 25, 2025, to discuss the five-year fiscal forecast for FY 2026-FY 2031 and budget priorities for the combined funds (CF) and the capital improvement program (CIP).
The School Board will continue working with staff and the community through the fall to refine these projections, identify priorities, and prepare for formal budget adoption in the spring. Families and community members are encouraged to stay engaged, as the funding of our schools is directly tied to the resources we can provide for students.
Our next Community Budget Forum will take place on October 15, 2025, at 6:30 p.m. at the Minnie Howard Campus. We hope you’ll join us and be part of the conversation. The more our community understands these challenges, the better positioned we’ll be to work together to fund our students’ future.
