WCPSS Faces $60 Million Budget Shortfall, Superintendent Proposes Strategic Cuts and Realignment

Key cost drivers include the opening of four new schools, an anticipated 3% compensation increase for employees, and rising costs for health insurance and retirement contributions.

Holly Springs, NC, Mar. 26, 2025 — The Wake County Public School System (WCPSS) is confronting a challenging financial landscape as it prepares its budget for the 2025–2026 school year. During the March 25 meeting of the district’s Budget and Finance Committee, staff and board members discussed the superintendent’s proposed budget, which includes a combination of cost increases, funding uncertainties, and a new round of proposed budget repurposing.

Rising Costs and Limited Revenue

One of the driving forces behind the proposed budget changes is a projected local funding need of approximately $60 million for the next fiscal year. Key cost drivers include opening four new schools, an anticipated 3% compensation increase for employees, and rising costs for health insurance and retirement contributions.

While the state is expected to cover salary and benefits increases for state-funded employees, the district must find local funding to meet these obligations for locally funded staff. Compounding the challenge is the requirement that approximately 11% of any increase in county appropriations must be passed through to charter schools.

The scheduled expiration of federal ESSER funds, which have supported critical student services in recent years, adds further strain. The district used these funds to partially pay for behavioral health support positions such as counselors and social workers. To maintain those roles in the future, local funding must be identified.

“There have been no easy decisions for these recommendations for repurposing,” said a district leader. “When Wake County and other districts in North Carolina rank among the bottom of the country in per-pupil funding and margins have long been all but eliminated, just about any recommendation is going to have an indirect or direct impact on our mission.”

Budget Repurposing Strategy

Faced with limited prospects for increased county support and significant uncertainty around federal funding, the district is turning to budget realignment. This includes cuts to some central office positions and programs, supply reductions, and changes to employee benefits. Leaders stressed that approximately 90% of WCPSS’s total budget goes directly to schools and that any repurposing decisions aim to minimize disruption to the classroom.

Of particular note, over 50% of the proposed repurposing comes from central operations, not schools. “We try to be very thoughtful in mitigating the impact on our core business, which is our schools,” a district official explained.

One of the most controversial proposals involves shifting the cost of dental insurance for employees. Currently, the district pays $28 per month for employee-only coverage. The proposal would make employees responsible for the full premium, resulting in an estimated $2.5 million in savings.

Expanded Story: WCPSS Department Leaders Detail Proposed Budget Cuts and Service Reductions

Uncertainty at the Federal Level

Budget planners also flagged federal funding uncertainty as a significant risk factor for the coming year. Federal contributions comprise around 8% of WCPSS’s total budget, just under $200 million. Any material changes to federal allocations—whether at the state or county level—could significantly impact the district’s financial position.

“As I shared with you a week ago, one thing is certain. Uncertainty will prevail,” a staff member warned, pointing to shifting dynamics in Washington, D.C., and potential changes to federal education funding.

Looking Ahead

District leaders emphasized that these budget decisions are preliminary and part of a fluid process. “This first one will be system-wide,” one official said, referencing the dental insurance proposal. “We don’t like it, but we put it out there.”

In the weeks ahead, the district will continue work sessions and community discussions to refine the budget further and consider potential alternatives. Ultimately, board members will weigh the administration’s recommendations against community input and the district’s strategic priorities.

As one leader put it: “Anytime we keep taking away from [staff] well-being, we’re causing the well-being of our children to be at stake.”

Expanded Story: WCPSS Board Voices Concern Over Budget Cuts Impacting Staff, Students