SPS Budget Update: Revenue Hopes & Proposed Cuts

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In this issue:

Proposed millionaire’s tax is our best hope for increased funding, but we need a K-12 commitment

If you’re only going to read one paragraph: 

The new “millionaire’s tax” proposal in the state legislature is our best hope in a long time for increased state K-12 funding, but it’s got a major problem: The additional revenue isn’t earmarked for K-12 education as lawmakers had previously hinted that it would be. Write your lawmakers to urge them to earmark 50% of this money for K-12 education with two quick and simple clicks, here.

If you’d like more detail:

For many years now, our state legislators have specifically cited a need for additional funding before they can adequately fund K-12 education. This new tax would generate upward of $3 billion annually. That’s enough to make a real dent in the $4 billion statewide under-funding of K-12 education, even if the revenue won’t start flowing until 2029.

Unfortunately, as it is written now, none of the $3 billion of additional revenue is dedicated to K-12 education. Lawmakers are promising verbally that some of it would end up in schools, via future legislation. The bill as it stands sends 95% of the new money to the general fund, where K-12 funding will compete for attention with many other causes. 

This bill matters so much because state funding comprises a majority of SPS’s income, as compared to local levies, which are capped, or federal funding, which is likely to diminish in the current climate. The millionaire’s tax is our best hope for increased state funding. If its new revenue fails to flow to K-12 education, it’ll likely be a long time before education gets another shot at increased funding.

Please consider joining me in writing to Governor Ferguson and your local legislators with two simple clicks, here. Feel free to personalize the stock message, or just send it as-is. This is a simple way to maximize our chances for increased funding. 

As the millionaire’s tax proposal works its way through the legislature, I’ll post relevant updates and additional calls to action here.

A menu of cuts for balancing the 2026-27 budget

Everyone familiar with SPS knows that the district has been in financial distress. Each year, we scramble to fill an operational budget gap that hovers around $100 million*.

For the coming 2026-27 school year, the gap between expected spending and expected income is $87.5M*, which is about 6% of the operating budget. The operating budget includes most expenditures incurred by running the district (staffing, building operations, classroom supplies, special programs, etc.). This does not include the BEX capital levy funds that support the district’s new construction and major renovations, and most of its technology. Curious readers can learn more about SPS’s four separate budgets here.

In past years, the district has filled the operational budget gap largely with one-time measures, including using the entire rainy day fund, and borrowing money from the SPS capital fund. In 2024, the closure plans that included Sacajawea were initially proposed as a way to save money to address the budget gap, although the claims that closures would save significant money were grossly overstated.

At last Wednesday’s board meeting, Fred Podesta, in his last meeting as Interim Superintendent, outlined a number of options for closing the deficit in the coming year. The proposals that are most directly relevant to Sac families include:

  • Changing to a three-tier bell schedule, from today’s two-bell system (estimated savings: $5M-$13M). This is an old chestnut that gets floated almost every year. The last time it was proposed in earnest, back in 2022, the proposed new bell times across the district were 7:30am, 8:30am, and 9:30am. (Sac was in the 7:30am start group, along with most other elementaries). After significant community pushback, the 2022 3-tier bell plan was dropped.

  • Changing back to a single bus vendor district-wide, from the two we use today (estimated savings: $1.5-6M). This would be a reversion back to 2021-22 and prior, when the district contracted solely with First Student for bussing. Parents of older students may remember the chronic problem of late buses delaying or interrupting morning instruction (I sure do!). This was a persistent, district-wide problem, which is why SPS made the change in fall of 2022 to use two bus vendors instead of one, despite the increased cost.

  • Mandatory athletic fees (estimated savings: $2.6M). This is another frequently-floated proposal. Last year, the district did impose convenience fees and voluntary athletic fees on athletic programs. Podesta didn’t share the amount of money that this change has already brought in, nor did staff speak specifically to the equity and access concerns that mandatory athletic fees would create.

Other proposals floated in Wednesday’s presentation included: A reduction of senior SPS administration and/or central staff; furloughs for non-represented staff; a reduction to half-time of Academic Intervention Specialists in high schools; and a refocus of professional development activities to those that directly support teaching. 

Podesta listed a few possibilities not being considered at this time. These included targeted class size increases; changes to the portfolio of SPS schools; and across-the-board salary reductions.

With Superintendent Shuldiner taking the reins, the timing of this initial budget discussion was admittedly awkward. Shuldiner will have his own opinions on both the budgeting process, and on the choices themselves, and these will rightly influence the development of the 2026-27 budget.


*Some close observers of SPS budgets, including me, believe the district’s annual deficit is actually much smaller than the reported $100 million. This analysis by SPS parent Albert Wong covers some of the reasoning behind the budget skepticism. This matters because an overestimated deficit leads to unnecessary budget cuts, which our community witnessed firsthand via the financially-motivated 2024 attempted closure of Sac.