The Fulton County Board of Education approved a tentative $2.46 billion budget for Fiscal Year 2026, but it came with a warning of financial problems coming in the next five years.
Superintendent Mike Looney told Board President Kristin McCabe during the school board’s May 13 meeting that in the next four to five years, the school district will face the most difficult financial challenges it has experienced in a long time.
“Without mincing words, we’re on a collision course to insolvency unless we cut expenses, raise revenue, or some combination of both,” Looney said.
McCabe said the school board made tough decisions this year, including instituting school closures and redistricting. The bleak financial outlook will require them to make more tough decisions in the next few years.
Fulton County Schools Chief Financial Officer Marvin Dereef said the proposed General Fund was $1.47 billion. This fund supports the day-to-day operations of the school district, including salaries, academic programs, student services, and transportation.
Other elements of the budget include:
- $803.5 million for capital improvements, funded through E-SPLOST
- $65.7 million in special revenue funds
- $59.4 million for school nutrition
- $43.2 million for the pension fund
- $16.7 million for student activity funds
Dereef said that based on historical spending patterns, the projected year-end fund balance for FY 2026 will be about $287 million. That amount represents nearly 20 percent of the general fund budget.
McCabe said the school district increased special education funding by 41.5 percent over the past four years, up to $213 million. She said the federal government should contribute 40 percent of the cost for special education, but it only gives Fulton seven percent of the revenue needed.
Looney said that special education is underfunded by the federal government.
Health care costs for the school district increased by 99.47 percent in the last four years, adding almost $60 million year over year, McCabe said.
In Georgia’s education funding formula, Quality Basic Education (QBE), a school district earns funding based on its number of full-time equivalent students, the training and experience of certified staff, and the health insurance eligibility of its certified staff.
However, the funding formula’s Local Fair Share provisions have Fulton County Schools giving back state QBE funding equivalent to 5 mills worth of property taxes. McCabe said the estimated Local Fair Share was $258 million cut out of state QBE funding.
“We don’t know exactly what our earnings are at this point, but it appears that it will be close to 48 percent of what we earn that we will be giving back to the state,” McCabe said.
Homestead tax exemptions also are rising, and McCabe said the school district anticipates $242 million in total exemptions. An additional $50 million may be cut through exemptions if a senior exemption on the ballot in November passes.