Fulton County Schools Superintendent Mike Looney told the board of education that increased revenue constraints and exemptions affecting property tax revenue will require some reductions to the fiscal year 2026 budget.
“We’re going to have to make some tough decisions together, and the budget that I propose to you is going to include some of those reductions. So I wanted just to honestly and candidly be transparent and what will be included in the budget recommendation that I’ll be making in the months to come,” Looney said at a recent board meeting.
A projected cut in state revenue and uncertainty in federal funding add to the downward pressure on local taxation revenue through homestead and senior property tax exemptions, Looney said. An increase in mandated expenditures caused by everything from inflation to rising costs for employee benefits and retirement have the school district’s executive cabinet planning for budget reductions. Drops in enrollment will reduce state revenue.
Looney said a 3 percent step raise for employee salaries has been reduced to 2.5 percent. He told department heads to cut non-personnel spending by 5 percent.
“Our primary goal remains to minimize the impact on services we provide to students and staff,” Looney said.
Chief Financial Officer Marvin Dereef presented another update to the board at its March 25 retreat. He shared other budget updates, including the elimination of an employee referral bonus and ending grades 3 through 5 at the Fulton Academy of Virtual Excellence.
The central office will cut several positions. Professional development for substitutes will be cut from three days to two.
Dereef’s presentation said the proposed FY2026 budget of $1.48 billion would be approximately $52 million more than the projected FY2025 ending budget expenditures.
If the school district spends 100 percent of its FY2026 budget, expenditures would be almost $100 million more than anticipated revenue. At 98 percent of budget expenditure, the shortfall would be $70 million.
This revenue deficiency would reduce the ending fund balance. Dereef’s presentation projected that with the millage rate remaining at 17.08 percent, even with more property tax revenue the school district’s fund balance could be $56 million in the red by 2030. The fund balance began at $403 million at the start of this fiscal year.
The presentation projected state revenue would drop by more than $74 million in 2030.
The board will hear budget figures for the capital improvement program and the superintendent’s general fund in April, with public budget hearings in May. The final budgets will be adopted in June.