Wake Schools projects $3M budget shortfall, citing rising costs and fewer subsidies

CARY, N.C. (WTVD) -- Wake County Public School leaders addressed a projected budget shortfall on Tuesday night, which they estimate is roughly $3 million and attributed to rising costs in the district and falling revenues. Though the district didn't request any additional taxpayer money at Tuesday's meeting, the school board heard from officials who zeroed in on problem areas they said they believe are putting the district in a hole.

"We're seeing costs go up for power, for food, for our school meals," said Chair Chris Heagarty.

Heagarty told ABC11 that economic forces -- including rising costs for food, labor and utilities -- as well as a dip in the district's vacancy rates and fewer federal reimbursements and subsidies have left them in a hole. On top of that, pandemic-era support is no longer available to help the district "fill the gap".

"All of these costs, even just to keep our schools level where they are, would mean that our budget would need to be higher," he said.

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ABC11 pulled the district's budget and public school enrollment numbers over time. Back in FY 2015, the WCPSS operating budget was $337.6 million for roughly 157,000 public school students. By 2020, it was $516 million for roughly 159,000 students. The adopted budget for FY 2025 is more than $702 million for a projected 160,000 students.

With $58 million more in its 2025 budget compared to last year's, ABC11 asked Heagarty where that expected $3 million shortfall came from.

"We make projections of the best that we can but it's a balancing act," he said. "You don't want to ask for too much and not need it because we know this money that we get. The money that you're referring to, we requested from our County and that required a property tax increase."

Those are tax increases that Heagarty said he wishes were reinforced by more state funding while saying North Carolina's schools have been hurt by falling corporate tax rates. He admitted that tough spending decisions may need to be made down the line.

"This is investment we have to make. I just wish we had more state funding and that the tax burden for it was spread out more evenly and it didn't fall on homeowners, said Heagarty.

Board members also pointed out at Tuesday's meeting that the budget shortfall highlights positive trends as well. For example, Wake County's falling vacancy rate suggests the district is returning to pre-pandemic employment levels while rising labor costs are a result of increased wages in the district -- meaning they're remaining competitive with other districts.