Funding Our Future: FY27 Budget, Part 3
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Where We’ve Been and What Comes Next
By: School Board Chair Michelle Rief (District A) and Alexander Crider Scioscia (District B)
Note to Readers
This post is part of an ongoing effort to help our community understand how Alexandria City Public Schools (ACPS) plans for the future—particularly when it comes to our budget. Since our January post, Funding Our Future: FY27 Budget, part 2, which highlighted the Capital Improvement Program (CIP), we have had several sessions to discuss the ACPS Operating budget, and on February 19th adopted it by unanimous vote.
This update focuses primarily on the Operating budget, which covers people and programs, including teacher and staff pay, classroom supports, and utilities.
Before diving in, it’s important to acknowledge the reality of this year’s challenging budget environment. Even so, we made a deliberate choice to prioritize pay increases for the dedicated teachers and education support professionals who serve our students every day and to protect student-facing services from cuts. Retaining and supporting the talented educators and staff who make our schools work is not optional—it’s essential. Their commitment, expertise, and care are what make our students’ success possible.
Through careful reductions and difficult tradeoffs, we narrowed our City appropriation request to a 3.5% increase over last year’s funding—at a time when ACPS is negotiating the school division’s first-ever collective bargaining agreements. The timeline below outlines how we reached this point—and the steps ahead.
How We Got Here
At our very first School Board meeting of the 2025–2026 school year on August 21, we shared with the community that ACPS projected needing $19.3 million in additional revenue in Fiscal Year 2027 to maintain our current level of services—a 5% increase over the current FY 2026 Combined Funds budget (the Combined Funds include the Operating, Grants and Special Projects, and School Nutrition Funds).
A breakdown of the $19.3 million was shared during two Funding Our Future budget listening sessions held on August 27 and September 17, with more detailed information about the budget development process provided at the annual ACPS Community Budget Forum on October 15.
November Budget Forecasting
Next, at the City Council’s annual budget retreat in November, council members reviewed the City’s revenue outlook and issued FY 2027 budget guidance to ACPS of a 1.5% increase in the City appropriation—about $4.2 million. Unfortunately, that amount would not even cover the estimated $8.9 million needed to fund a step increase for ACPS staff.
During the retreat, ACPS presented information about the division’s anticipated funding gap based on the City’s budget guidance, along with a budget overview for the school system —including a breakdown of the budget by state function code, which are the same major classifications City Council is proposing for the FY 2028 City appropriation to ACPS.
Deliberate Decisions and Strategic Tradeoffs
During January and February, the Superintendent presented the FY 2027 Proposed Budget, and the School Board engaged in thoughtful deliberations to make careful adjustments and difficult tradeoffs. Through this process, we reduced our City appropriation request to a 3.5% increase over last year’s funding.
Cost savings in the approved budget total $7.7 million and include the following:
Reduction of 10.5 non-instructional full-time employees (FTEs) and 3.3 instructional FTEs totaling $1.6 million
Non-instructional FTEs eliminated include the following central office positions: 2.0 Executive Directors, 1.0 Communications, 1.0 Human Resources Analyst, 1.0 Technology Services, 1.0 School Board Administrative Assistant, 0.5 Data Analyst, and 1.0 Family Liaison; additionally, 2.0 School Security Officers and 1.0 Custodian will transition to contracted services
5% reduction in non-personnel expenditures totaling $2.2 million
5% shift in healthcare premium costs totaling $2 million
Virginia Retirement System (VRS) savings totaling $1.9 million
5% increase in facility use fees
It’s important to note that the FY 2027 City appropriation request—a 3.5% increase—represents one of the smallest percentage increases requested in the past 15 years. It reflects what we believe is necessary to maintain the level of services that public school families expect from Alexandria City Public Schools.
What the Board Adopted in February
On February 19, the School Board unanimously adopted the FY 2027 Combined Funds Budget totaling $406.5 million, which includes:
Funding for Collective Bargaining Agreements with ACPS teachers and support staff
$11.4 million was included in a reserve for compensation which, when combined with savings, covers the cost of wage and step increases in the tentative collective bargaining agreements; additional savings cover healthcare premium increases and inflationary costs)
Preserves 1.0 FTE Middle School Latin itinerant teacher (1.0 Middle School Chinese itinerant teacher was included in the proposed budget)
Preserves 1.0 FTE Afghan Cultural Liaison and 1.0 FTE Afghan Coordinator
No cuts to student-facing services
Why It’s Imperative to Prioritize Teacher Pay
Two years ago, ACPS offered the highest starting teacher salary (for teachers with a Masters degree) in the region. In just one year, however, our ranking has dropped to seventh. Part of this shift reflects neighboring divisions implementing their first collective bargaining agreements this year, but it also points to a broader regional trend.
Historically, school divisions closer to Washington, D.C.—including Alexandria—offered higher salaries that attracted educators willing to commute for better pay. Today, some outer jurisdictions are experiencing stronger revenue growth, in part from expanding data center development, and are beginning to surpass us in compensation. If this trend continues, it could make it harder for ACPS to recruit and retain the teachers and education support professionals our students and families rely on.
Teacher compensation in neighboring school divisions is expected to increase between 4.5% and 7.5% in FY 2027, making it critical that ACPS sustains competitive salaries to attract and retain high-quality educators in Alexandria.
City Manager’s Proposed FY 2027 Budget
On February 24, City Manager Jim Parajon presented the City Council with a FY 2027 General Fund Operating Budget of $977.3 million, a 2.2% increase over the current year. The proposed budget allocates $286.6 million in operating funds to ACPS, a $4.2 million (1.5%) increase over FY 2026. The difference between the School Board’s requested 3.5% increase and the City Manager’s proposed 1.5% increase leaves a $5.6 million funding gap.
The School Board and City Council recently held a joint work session to discuss the FY 2027 Budget and the City appropriation to ACPS, which can be viewed here.
Over the past five years, the City’s investment in ACPS has increased by $56.2 million, including $37.8 million in operating funds and $18.3 million for debt service on school capital improvement projects. This increase represents a portion of the $138 million growth in the City’s overall budget since FY 2023. Over the same period, both the City and ACPS have worked to identify savings, with City reductions totaling $30.8 million and ACPS reductions totaling $18.9 million.
Our City has made historic investments in recent years modernizing aging buildings, including schools. As a result, the “cash capital” and debt service contributions to support these projects are placing increasing pressure on the Operating budget. The table below shows how the operating transfer to ACPS has declined as a percentage of the total City Budget while the debt service for school capital improvement projects has increased. Managing this pressure will remain a key challenge for the City Council and School Board in the years ahead.
Collective Bargaining Agreement Announced
On March 4, Alexandria City Public Schools and the Education Association of Alexandria (EAA) announced a historic first tentative collective bargaining agreement on wages and step increases totaling $12.7 million. Because ACPS set aside a reserve for compensation in its initial budget request, the announcement of the tentative agreement between ACPS and EAA on wages and step increases does not change the City appropriation request.
The key terms of the agreement include:
A Step increase for all eligible employees in both bargaining units;
Additional step increase for Licensed employees employed with ACPS since 2010-2011;
2.0% COLA for all Licensed employees;
3.5% COLA for all Education Support Professional (ESP) employees; and
$2,000 longevity bonus for all eligible ESP employees on each 5-year anniversary date.
This represents a 5.35% average increase for the Licensed personnel and 6.42% average increase for the ESP employees. Per Section 8.D of the School Board’s Collective Bargaining Resolution, “any Collective Bargaining Agreement reached between the Employer and an Exclusive Representative shall be contingent upon the appropriation of sufficient funds to the Employer in the next ensuing budget cycle.”
The tentative wage and step increases for approximately 2,500 ACPS employees are comparable to the compensation increases provided in the City of Alexandria’s four collective bargaining agreements covering approximately 1,500 city employees, with an estimated fiscal impact of $8.23 million. The links below provide more details on each agreement:
What comes next?
The City Council is scheduled to adopt the FY 2027 Budget on April 29, leaving time for community members to share their input and have their voices heard before the final decision. Here are some ways you can participate in the budget process:
Submit a public comment on the FY 2027 Budget to City Council:
Sign up to speak at an upcoming City Council Budget Public Hearing:
Location: Del Pepper Community Resource Center
4850 Mark Center Drive (free underground parking garage)
After the City Council adopts the FY 2027 Budget, which will include the City appropriation to Alexandria City Public Schools, the Superintendent will present an adjusted budget to the School Board incorporating up-to-date information on anticipated state and city revenue. The School Board will review the proposed adjustments and may make further additions or deletions as needed to balance the budget, with final adoption scheduled for June 11.
Final Thought
Our public schools, without a doubt, play a vital role in our City. Throughout this budget process, we have approached decisions with transparency and fiscal discipline—reducing 13.8 FTEs, requiring all departments and schools to cut 5% of non-personnel expenses, adjusting the healthcare premium split, increasing facility use fees, and holding off on adding new staff or programs. Every step has been taken in service of our students and teachers: to sustain competitive compensation, finalize our first-ever collective bargaining agreements, and protect student services as much as possible.
We want to say it again: our teachers and staff are the heart of the schools. Without them, we cannot give our students the quality education that they deserve. The theme of the City’s FY27 Budget is “Steady Progress” and that is exactly what we are trying to do.