Dollars & Decisions — Tightening Now to Address FY26 Budget Pressures💵

November 10, 2025

This is the second installment of Dollars & Decisions — a series charting the path ahead toward the FY 2027 budget.

Taking Action: Tightening Now to Address FY26 Budget Pressures

Every day across our schools, someone makes a difference — a teacher staying late to help a student, a bus driver greeting riders by name, a custodian ensuring classrooms are ready for learning. This shared commitment is what makes our district strong and keeps us focused on what matters most: our students and schools.

That same care must guide our financial decisions.

National fiscal pressures are beginning to affect school systems, including PGCPS. Rising costs in areas such as special education, transportation, and employee benefits are straining the current budget.

To remain fiscally responsible and sustain the progress we've made, the district is taking early, deliberate steps to manage resources carefully and prevent overspending.

As the district nears the midpoint of FY26, financial pressures are already emerging, with an even more challenging FY27 budget expected ahead. Rather than waiting for those challenges to deepen, PGCPS is acting now to maintain stability by tightening spending and slowing hiring. These steps are designed to keep the district ahead of potential shortfalls and ensure continued investment in student learning.

Effective immediately, a districtwide hiring freeze is in place for Central Office positions.

School-based positions — teachers, substitute teachers, bus drivers, safety and security staff, and maintenance personnel — are exempt, and principals are encouraged to move quickly to fill existing vacancies.

The district is also reviewing all discretionary spending, including non-local travel, catering, and meeting-related expenses.

“These steps are about acting responsibly now so we don't face even tougher choices later,” said Interim Superintendent Dr. Shawn Joseph. “We'll reassess early next year once we have concrete numbers to determine if additional tightening will be needed.”

~Interim Superintendent Dr. Shawn Joseph

Why is This Necessary?

Financial pressures are already being felt this fiscal year, with several key cost drivers including:

  Special education costs: Contracted services and aide conversions have added more than $40 million this year alone.

   Fewer Vacancies: Higher employee retention has reduced 'salary lapse' savings that typically provided flexibility.

  Inflation: Prices for food, fuel, and supplies continue to rise.

  Compensation and Benefits: Annual increases in salaries and healthcare costs compound each year.

  Transportation: Ongoing driver shortages have increased operational costs.

  Limited Savings Balance: Our school district savings account was used heavily in previous years, and it would not be financially responsible to use it again this year to get us through the year.

Without action, these pressures could push the district to overspend by tens of millions this year.

To stay balanced, the district must reduce spending by approximately $50 million in FY26 and an additional $100 million in FY27, for a total of roughly $150 million in savings aligned with projected revenues.

What's Next?

Despite these challenges, the district's focus remains unwavering:

 Protecting and enhancing student services

Meeting state Blueprint for Maryland's Future requirements

 Sustaining our “Big Rocks” priorities and long-term strategic goals

Protecting wage increases and healthcare costs

Save the Date! Join us Tuesday, Nov. 18, at 6 p.m. for an employee telephone town hall on the FY27 budget. Learn about district priorities, challenges shaping next year’s budget, and next steps in the process. You'll also be able to ask questions live. All employees will receive a phone call at 6 p.m. to participate.

2027 Budget: Key Dates & Resources

The coming months will require collective discipline, creativity, and collaboration. 
PGCPS will continue to communicate transparently as the district navigates this fiscal landscape. 

Stay tuned for updates through our Dollars & Decisions series as we navigate these choices together.