Declining enrollment, increased wages and staffing shortages have led to a projected $9 million budget deficit for Denver Public Schools.
After local tax increases and more funding from a state program, that deficit is actually $14.5 million less than what was projected two months ago.
And the problem likely won’t go away any time soon. District officials forecast a deficit through at least the 2025-2026 fiscal year unless changes are made, reports The Denver Post.
“We are really trying to run a balanced budget,” Chief Financial Officer Chuck Carpenter said. “If we do nothing, this is what is going to happen in the next several years… We are in a reasonably healthy place right now, but there are headwinds and we will need to readjust to the fiscal realities of the future.”
The district estimates it lost approximately 1,000 students from the 2021-2022 school year, blaming a decline in birth rates and increase in housing costs in the Denver area.
The district is also running low on the $200 million of emergency relief funds it received during the pandemic. Those funds will run out by the end of the 2023-2024 school year, Carpenter says, and there is no revenue stream set to replace those funds once they are gone.
Enrollment statewide has decreased since the pandemic though state funding remained steady. But for years policy experts have been questioning the impact of increasing salaries and administrative positions.
A report from Colorado’s Common Sense Institute shows that despite modest enrollment gains since 2007, average teacher salaries are up 27% and per-student funding is up 47% across the state.
And since 2000, though student growth is at 25%, the state employs 36% more teachers, 73% more principals, and 132% more administrators, costing districts millions.
DPS already underwent a reorganization last year when it cut dozens of positions from its central offices in a cost-saving measure, but more is needed to keep the district above water.
Official forecasts for the district’s budget through the 2025-26 fiscal year predict its reserves will decrease from about $124.3 million at the end of 2022-23 fiscal year to $96.6 million.
The school board is currently considering a plan to close two schools, but there is no word on when a final decision will be made.