Preliminary RCSD budget again contains big funding gap

For the second straight year, the Rochester City School District is facing a large funding gap in its preliminary budget. This time, it is over $53 million.

At a presentation last month and brief update this week, RCSD chief financial officer Robert McDow said the estimated general fund budget for the 2026-27 school year, without reductions and estimated expense increases, is $983 million. This includes a budget gap currently at $53 million, which is greater than the previous year’s budget gap of $38 million.

“We’re going to look under every rock,” McDow said at December’s meeting. “We’re going to look everywhere, because (in February), we have to have a balanced budget.”

The gap—totaling $53,086,455—was explained as a combination of an expected decrease in revenue with an increase in expenditures.

State aid, which historically makes up the lion’s share of the RCSD budget, is projected to be $830 million, an increase of $17 million. However, local revenues are dropping due to interest rates and, even with two new charter schools opening next year, there will be a net decrease of $7 million in charter school aid.

In addition, there was another $6.7 million in grant funding projected as a loss, which the RCSD administration learned last week. This loss of funding is projected based on federal grants shrinking, particularly for Individuals with Disabilities Education Act grants, McDow shared.

Transportation expenditures are projected to have the greatest proportional growth, increasing 17 percent compared to last year, from $76 million to $90 million. The cost of benefits related to health insurance is also growing at a high rate, with McDow estimating an increase of 15 percent to 18 percent compared to the 2025-26 budget.

Payroll contracted services were also listed as an important expenditure, referencing RCSD superintendent Eric Rosser’s desire to consider switching providers. At the beginning of this school year, a messy transition to the Oracle payroll system left payments to hundreds of RCSD employees delayed, containing errors, or missed entirely.

The possible solutions McDow is looking at include reviewing staffing and operations at RCSD’s central office as well as teachers on assignments.

“There needs to be some sort of huge change. I know I’m preaching to the choir here, but I’m very concerned about the sustainability year after year in seeing these gaps,” RCSD board vice president Amy Malloy said, noting the previous year’s $38 million budget gap. “I know that there are increases in benefit costs, etc., that are expected, but our footprint is way too big. Is reviewing central office staffing or teachers on assignment going to add up to $39 million?

“Right now, we have a very comfy fund balance and cushion, but that’s going to deplete very quickly within four or five years,” she added.

The board and previous superintendents have consistently stressed not using the fund balance surplus to fill any budget gaps. In last year’s deliberations, commissioners specifically highlighted concerns at the federal level due to uncertainty with the Trump administration. 

Rosser agreed with this approach.

“(Fund balance) is typically only good for one-time shots,” the superintendent said. “That money doesn’t regenerate itself for sustainability.”

In order to close the 2025-26 RCSD budget’s gap, then interim superintendent Demario Strickland also focused on staffing, particularly for “non-mandated” full-time employee positions. The finalized budget had FTE position cuts for four administrators, 18 civil service employees, and 92 teachers. (In contrast, paraprofessionals and teaching assistant FTE positions increased.)

In addition, the state contributed $9 million more than originally expected for that year’s budget.

McDow called drawing on the fund balance this year a “last resort.”

“There are things we can change. We’re spending a lot on benefits. I don’t want to change the benefits, I want to change the structure so it doesn’t cost us as much,” he said. “We have a lot of students leaving. We need to bring them back.”

Rosser indicated that shifting the district entirely to a community school model by 2028 was part of his strategy for drawing students back. He believes that offering greater support for students and families due to school-provider partnerships will attract those who may otherwise consider other options, such as charter schools.

In addition, he said this preliminary budget will also provide investments in student literacy, early interventions, multilingual supports, and emotional well-being. It will also invest in staff by providing professional learning, “equitable and fair compensation,” and operational improvements.

“We did not want to wait (until February) to provide this information to the board and the community,” Rosser said at this week’s meeting. “It is my understanding that last year, during this time, this information was not shared. We’re looking to do things differently so that when it comes to producing a budget for the community and the board, they come with us every step of the way.”

This picture should ultimately gain more clarity in about a week, when Gov. Kathy Hochul’s budget plan is set to be released.

Following that, the district’s budget will be presented to the board at the end of February, then submitted to the state monitor, who will present it to the board in March. April will have budget hearings with the public and City Council, with final deliberations and a vote set for mid-May.

Jacob Schermerhorn is a Rochester Beacon contributing writer and data journalist.

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