FY27 Budget
Dear RPS Family,
As we enter 2026, I am filled with gratitude for the extraordinary work our teachers, principals, and support staff do every day – all of which has led to remarkable gains for students. For example, the Class of 2025 had the highest graduation rate in nearly 20 years for Black students and economically disadvantaged students. We are also seeing much faster gains in reading than the rest of the Commonwealth. Of course, we still have a long way to go, but we are unequivocally on the rise.
That’s why it pains me to share that this will be a difficult budget year. In short, we are expecting only modest increases in revenue from the City and state (more on that below) while our costs continue to rise precipitously. As a result, I’m proposing some difficult reductions to maintain a balanced budget.
Before getting to those reductions, allow me to explain why the revenue picture is less promising this year. On the City side, we get most of our funding from property taxes. With the planned assessment freeze for next year, the pie just won’t increase very much. On the Commonwealth side, the General Assembly is grappling with how to fund Medicaid now that costs were shifted to the states given actions at the federal level.
At the same time, our costs continue to go up – for salaries, health insurance, transportation, and all sorts of contracts. In addition, many sources of one-time funding – like the state’s All-In tutoring program – have sunsetted.
As a result, we need to make a number of painful reductions to stay in balance. Most notably, I am proposing that we:
- Pause all raises for one year (but maintain the annual 1.17% step increase);
- Reduce nearly 50 full-time employees from the Central Office;
- Share the increase in health insurance costs (not the total cost) 50/50 with employees;
- Close the Richmond Virtual Academy, which was created in response to the pandemic and initially funded with COVID relief dollars;
- Cut summer school for K-8 students;
- Reduce by 30 percent our mental health and wraparound support contracts;
- Furlough all senior staff (directors and above) for 2 days; and
- Furlough myself for 5 days.
I know that these recommendations will be difficult for the RPS family. Please know that I do not make them lightly. I have agonized over them for several weeks, trying my very best to keep us on solid financial footing while doing everything I can to protect our schools.
Over the coming weeks, I look forward to engaging with the School Board, our union partners, and the broader RPS community about these proposals. Together, I know we will find ways to improve upon them in time for the Board to make its final decisions before sending our budget on to the Mayor.
This will also be a year in which advocacy – particularly at the state level – will be critical. Though Medicaid costs are taking center stage, we need to keep education at the forefront of everyone’s minds. We’ll be sharing more about how you can help with this over the coming days. Thank you in advance for your support and your grace.
With the deepest appreciation,
Jason
Behind the Budget Numbers
Richmond Public Schools’ 4,000 staff serve nearly 22,000 students across 52 school sites and programs. To do so effectively, the RPS Administration develops a budget every year, which is first approved by the School Board before being finalized by the Richmond City Council. For the upcoming fiscal year, RPS is requesting an additional $6 million from the city, bringing their total contribution to $254.9 million. We also anticipate a $7.3 million increase in state funding, for a total of $182.4 million.
Budget Timeline
December — The (outgoing) Governor releases their proposed budget for the upcoming fiscal year, which includes education priorities, and (in even years, like 2026) a “caboose” budget for the current fiscal year. This gives school divisions an understanding of what state funds to expect.
January — The RPS Administration prepares a budget and presents it to the Richmond City School Board. RPS then holds feedback sessions for the public to weigh in. Simultaneously, the General Assembly begins to deliberate on the overall state budget.
February — The School Board votes to approve the budget, moving it to the Mayor and the City Council, for final approval of the City contribution.
March — The Mayor includes his recommendations for RPS’ budget in his proposal to City Council.
April — City Council deliberates the full City budget, including the School Board’s request. The General Assembly reconvenes if necessary to finalize state funding.
May — City Council votes on a final budget. Typically, the Governor signs the state budget at this time, as well.
June — The Administration makes any adjustments to the upcoming budget based on Council’s allocation + changes to state policy.
July — The new fiscal year begins.
Where does the money come from?
RPS receives funding from three sources: the City of Richmond, the Commonwealth of Virginia, and the federal government. School divisions cannot levy taxes in Virginia, and so the School Board and the Administration work closely with elected officials to ensure our needs are communicated and met.
Commonwealth of Virginia
The Commonwealth of Virginia has the constitutional responsibility for all Virginia students’ education. The General Assembly (GA) appropriates funding to all school divisions, based on a funding formula. The Local Composite Index or LCI (see sidebar) and the Commonwealth’s Standards of Quality are the foundation of the state’s appropriation.
The City of Richmond
In FY27, the City of Richmond (CoR) is expected to contribute 58 percent of RPS’ budget, based on the state’s funding formula. CoR funding also offers RPS the most flexibility to fund priorities, as state funding is set by statute. However, the CoR also needs to fund important services that support our families — like housing supports, social services, police, and infrastructure.
The U.S. government
Finally, the U.S. federal government contributes about 12 percent of RPS’ budget. You may hear this referred to as Title funding, because these funds align to a specific “Title” grant. Federal funds are specifically meant to even the playing field for under-resourced schools. Federal funding supports our nutrition program, teacher development, and services for multilingual learners.
The LCI is based on three factors: The true value of real-estate property, the adjusted gross income of residents, and the amount of retail sales, compared to the number of local students served by the school division. In FY27, Richmond’s LCI will be 58%, meaning the City of Richmond is expected to pay 58% of the education budget. Somewhat surprisingly, our neighboring counties have lower LCIs: Henrico’s is 43% and Chesterfield’s is 36%. This means that the State expects Henrico to pay only 43% of total education costs, and Chesterfield to pay only 36% – with the State picking up the tab for the balance.
Where does the money go?
The overwhelming majority of funds go directly into schools or student assistance, including transportation, behavioral specialists, and family services. The remainder covers centralized services, including payroll, academic supports, and human resources. This year, RPS prioritized preserving as much school-level funding as possible. We’ve seen huge impacts from those investments over the last five years, and we don’t want to lose any momentum.
What other sources of funding do we have? What do they fund?
RPS receives funds from a few additional sources, particularly for our infrastructure needs. Long-term facilities and infrastructure projects, like building new schools, are covered primarily by the City’s Capital Improvement Program (CIP) budget. Over the last couple of years, RPS has also received funding from the state’s School Construction Assistance Program (SCAP). Since 2018, the Richmond City Meals Tax proceeds have also gone toward new school construction.
While deeply appreciated, these investments unfortunately do not meet the school division’s needs. The average age of an RPS school building is 69 years, and an independent third-party estimates that we have more than $43 million in immediate facilities needs (such as roof repairs, boiler replacements, etc). Localities cannot fund infrastructure needs of this scale on their own. Over the next decade, this number will increase tenfold. State and federal level intervention is necessary.
Salary and CBA investments
Since 2018, we’ve increased our starting teacher salary from $45,026 to $55,881, and now are proud to offer competitive teacher-compensation packages. In that same time period, salaries have gone from 79.96 percent of our budget to 83.74 percent. Richmond City was proud to become the first school division in the Commonwealth to sign collective bargaining agreements in 2023. Today, our salaries and compensation packages lead the region.
Investing in staff is investing in our students. Accordingly, in our new proposal $321,482,197 goes toward school-based employees:
- $231,955,975 goes toward teachers, counselors, social workers, librarians, psychologists, and speech pathologists.
- $89,526,222 goes toward other school employees like nurses, custodians, instructional assistants, and school administration.
Like every other employer in the Commonwealth, though, we are facing rising healthcare costs, as we and our employees face a rising cost of living. To keep as many funds in classrooms as possible, our budget this year includes asking our employees to:
- Forego raises for one year
- Split just the increase in healthcare costs with RPS 50/50 (NOT the total cost of healthcare)
- Cover their own vision insurance (currently covered entirely by RPS)
What does this mean for RPS students?
We are presenting a budget that preserves nearly all in-school personnel and programming. There are recommendations that impact wraparound programming, like after school time, social-emotional supports, and summer learning opportunities. We are working with partners to ensure continuity for students. Additionally, we are unfortunately recommending the closure of the Richmond Virtual Academy which was funded with COVID-era dollars. We will be working with those families to find the best option for their students, and working with RVA teachers to find a role at another school within RPS.
What does this mean for staff?
For most of our employees — those whose insurance covers only themselves, themselves and a child, or themselves and a spouse — the impact will translate to between $10–$30 per pay period. RPS will conduct insurance open enrollment this spring, and we will be sharing more information directly with employees
When is this all happening?
If adopted by the Board, these changes will take place beginning at the start of our next fiscal year — July 1, 2026. There are no changes planned for our current year.
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