Crunch time for the RCSD budget

In January, the Rochester City School District administration reported a preliminary 2026-2027 budget deficit of $49 million. Today, that figure has been reduced by more than half.

Revisions have cut proposed spending by $26 million, the latest update from RCSD leadership indicates. Though difficult decisions still must be made, Superintendent Eric Rosser is encouraged by the process so far.

“The preliminary budget reflected a framework and a commitment to continue to uplift a student- centered approach that increases our impact on student outcomes in and out of school environments,” he said at a March 26 presentation. “Through that process, we remain focused on advancing student success by investing and maintaining focus on strategic priorities, placing more certificated teachers in the classroom, creating greater efficiencies through staffing and program alignments, eliminating non-essential expenditures, as well as looking at the long-term financial stability of the school district.”

Rosser will discuss the budget in a wide-ranging online conversation with the Beacon slated for noon to 1 p.m on April 17. (It is free to attend, but registration is required.) 

The superintendent has proposed using the district’s fund balance, which currently totals over $312.8 million, to close the remaining $23 million 2026-2027 budget gap.

Use of the fund balance is an option the RCSD board has been trying to avoid, with many commissioners citing the 2019 state intervention and Securities and Exchange Commission investigation into the district as a cautionary tale. The probe led to SEC charges against the city, its former finance director and a former RCSD chief financial officer who allegedly misled investors with bond offering documents that contained outdated RCSD financial statements and did not disclose that the district was experiencing financial distress due to overspending on teacher salaries. The charges were settled in 2024.

“I joined the board back in 2020 after the biggest crisis that we’d had—we (had) just laid off 600 employees,” RCSD board vice president Amy Maloy said at the presentation. “And although I didn’t have to make that decision, I certainly don’t ever want to have to make similar decisions in the future.”

Rosser said he understood that concern and stressed he was taking a “disciplined approach” to using money from the fund balance. Further, he warned that the district’s long-term financial plan has to change or the reserves will quickly disappear.

“Fund balance, of course, is used for rainy days,” Rosser said. “But when we look at the projection of our financial condition, if we do not change anything today, the fund balance that we have will quickly be used up.”

The board’s first RCSD 2026-2027 budget deliberation will be held on Tuesday, April 14, with a public hearing the following week.

The current picture

According to the 2026-2027 draft budget book, which was submitted to the board this week, the proposed budget currently sits at $1.15 billion ($1,154,787,119 to be exact), an increase of 3.3% from last year.

Employee compensation and benefits make up 54 percent of total spending of the general fund, at $344 million and $204 million, respectively.

Contractual services account for an additional $313 million, or 31 percent. The largest items in that category are charter school tuition ($154 million) and transportation contracts ($74 million). Both have some of the highest increases since last year, along with computer software.

As State Monitor Jaime Alicea put it in his budget presentation: “80 percent of the budget is people.”

“When I talk about compensation, it’s not only compensation right now,” he added. “It is the bargained agreement that the district is working on for the next three or four years. We want to make sure that there’s funding included in the budget for those negotiations.”

At the beginning of his tenure last summer, Rosser had to quickly hammer out a one-year contract extension with teachers, and soon he will be looking to make a longer term deal for the future. Teacher turnover in the district remains high in comparison to the rest of the state while the median salary is lower than the comparable Buffalo City School District.

The budget book notes that health insurance is one of the fastest-growing expenses for the district, increasing by $14.3 million, or nearly $12 million, in the proposed budget.

The majority of the general fund revenue, the primary operating income for the district, is coming from the state. It makes up $827 million (82 percent) of the total. Property taxes account for $119 million, with $4.5 million coming from federal sources. The rest is from other local sources, interfund transfers, and the fund balance. (The federal government also contributes roughly $55 million in special aid.)

This is in line with trends in the general fund since the 2022-2023 school year, although the overall total has risen from $836 million to $1.15 billion since then.

FTE cuts

While employees are the largest expenditure, the draft budget cuts 76 full-time equivalent employees, down to 5,591.8 FTEs total. This is a striking change since Alicea’s March presentation, which indicated that only 18 FTEs would be eliminated.

The category hit hardest by these cuts is teachers, who will see a decrease from 3,043.4 to 2,962.3 FTEs (2.7 percent). This is the lowest FTE total for teachers and the first time they have been under 3,000 over the last seven years.

This decrease is partially driven by the closure of Northwest, which had 99.2 FTEs. Andrew Langston Middle School, which is consolidating with Northwest Middle School next year, gained 63.1 FTEs, more than doubling its total number of teachers.

Padilla High School has the biggest reduction out of schools remaining open, losing 31.4 FTEs, or 12.4 percent of its teachers, in the 2026-27 school year. Thurgood Marshall Middle School had the largest gain: 15.4 FTEs, or 14.3 percent.

Civil service and administrator positions also see cuts in the draft budget: 50.4 and 17.8 FTEs, respectively.

In contrast, teaching assistant positions will increase from 306 to 361 FTEs (18 percent). Paraprofessional positions will increase as well, from 633 to 652.2 (3 percent).

“It’s not about reducing positions. It’s about rightsizing the district,” Alicea said of the overall picture. “Looking at the number of students that we have and the services that we need to provide and aligning them with that number of students.”

He also mentioned that the budget retains instructors who are essential to the board goals, such as reading teachers, intervention prevention teachers, and instructional coaches.

The other Big 5 districts

Among other school systems in New York’s Conference of Big 5 School Districts, an organization representing urban districts, the Syracuse City School District is currently the best comparison for RCSD for the 2026-2027 school year.

While the Syracuse City School District (19,440 students) has comparable enrollment to RCSD (21,331 students), its proposed budget is much smaller at $639.5 million.

The Syracuse district is spending proportionally more on its employees than RCSD: 65 percent of its budget is allocated to employee compensation and benefits, compared with 54 percent for Rochester.

In contrast, professional services account for 24 percent of Syracuse’s budget, versus RCSD’s 31 percent.

Similar to Rochester, Syracuse is currently facing a budget gap. SCSD chief financial officer Michael Puntschenko says the $30 million gap will be covered with a combination of state money and cuts, but has yet to reveal what those cuts are.

Meanwhile, the Buffalo City School District (29,681 students) this week asked the state comptroller’s office to conduct a review of its structural deficit. Buffalo has yet to release a specific proposal or budget message, but the gap for the district has been estimated at anywhere between $50 and $109 million. 

The Yonkers City School District (24,339 students) reported a budget gap of $101 million last month. The district largely blames the foundation aid formula set by the state government, which district officials say annually underfunds them.

(The server for Yonkers’ entire web presence was down during the reporting of this story, so a total for the 2026-2027 budget could not be determined. However, the 2024-2025 school year budget was $814 million.)

The smaller districts in Utica (10,456 students) and Mount Vernon (6,489 students) have had comparatively fewer challenges this cycle with their budgets totaling $310 million and $297 million, respectively. Utica currently faces no budget gaps and no position or program cuts while Mount Vernon, now helmed by former interim RCSD superintendent Demario Strickland, is planning to fund new expenses with a 1.99 percent increase to the tax levy.

The Albany City School District has not released any information on their 2026-2027 school budget, but has set a date for voting on it for May 19.

Also impacting school budgets is a delay at the state level. Gov. Kathy Hochul and state lawmakers have missed their April 1 deadline to pass a budget for the fifth year in a row, this time reportedly over disputes related to the 2019 Climate Leadership and Community Protection Act, Medicaid spending, and a car insurance policy.

The delay has, once again, left many schools uncertain about funding. 

“What was signaled to me is that the things that (the governor and Legislature) are going back and forth over have nothing to do with education, but we’re just sort of caught in the middle until such time that they can resolve their conversations regarding other areas to fund,” he said. 

“As I’ve shared in my communication to our various stakeholders, it has been signaled that the Rochester City School District will receive appropriations that go beyond the governor’s executive budget,” Rosser added. “However, until we receive confirmation of the legislative budget, enacted budget as well as these other revenue streams, we cannot publish and put forward anything other than our preliminary budget.”

Concern about the future

Although RCSD’s financial health looks better in comparison to some Big 5 Districts, the picture could darken in the near future.

Alicea’s latest five-year revenue projection indicates that the district could face a $128 million deficit by 2031, even with the current fund balance of $312.8 million.

“Looks like we have money in the bank, right?” he said. “If we add that dollar amount (the gap between revenue and expenditures), though, the district will go bankrupt again. Like Dr. Rosser mentioned before, in the year 2018-2019, the district went bankrupt. They had a deficit of $27.4 million. You don’t want to be in that position again.”

RCSD was able to weather the earlier financial crisis thanks to a state bailout with “spin up” loans—emergency advances on future state foundation aid—in 2020 and funds from the federal American Rescue Plan Act in 2021. However, underlying issues of declining student enrollment, unfunded mandates, and increasing utility and transportation costs persist.

While Rosser said he is examining transportation contracts in an effort to save money, student numbers remain the most fundamental issue for RCSD. The 2025-2026 School Year Budget projected that public school enrollment would fall by 14 percent to 18,426 by the 2027-2028 school year.

Charter school enrollment, on the other hand, was projected to increase by 16 percent to 9,644, meaning more than one in three students in Rochester would attend charters. Stemming that tide is part of district leadership’s long-term strategy.

“What we need to do is to make sure that we continue to provide quality education to all the students in the Rochester City School District and when that rumor is out there, they will come back,” commented Alicea. “If we have quality programs, if we are providing the services, if we have the community school models, if we have certified, quality teachers, people will see what is happening in the Rochester City School District. (RCSD will be) making the front page of the paper and know great things are happening. (Families) will say, ‘I want to be part of that again.’”

Rosser stressed that difficult decisions could be on the horizon but should be made with the students’ well-being in mind.

“As educators, as educational leaders, it is important for us to lead in such a way,” he said. “Making important decisions—sometimes not the popular decision, but making important decisions on behalf of our children and our school district.”

Added Rosser: “It is important that we remain unified and that we continue to advocate for there to be changes to the funding formula for urban schools. Continue to advocate for there to be discipline and understanding at the federal level of the importance of the Department of Education and the funding structures to provide our children, not only the Rochester City School District, but children across this country with access to be able to utilize education as a civil right to be able to advance socially, economically, and mobilely.”

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

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