Tuscaloosa City Schools Propose $201 Million Budget for Fiscal 2027
Tuscaloosa City Schools Finance Officer Jay Duke presented a $201 million proposed budget for Fiscal Year 2026-27 during its first reading this week.
What the Proposed Budget Provides
The proposed budget includes approximately $194 million in anticipated revenue and $201 million in expenditures across all district funds. The general fund budget includes approximately $148.5 million in revenue and $161.7 million in expenditures, according to Duke's presentation.
"This is a one-year budget, but this budget has been developing over the last two or three years," Duke said. As is normal, instruction remains the district's top priority.
Additional funding includes $26 million for auxiliary services, including transportation and child nutrition; $24 million for operations and maintenance; and $7.6 million for general administrative services.
Career and technical education, summer learning, technology, social workers, school nurses, prekindergarten, arts and music, International Baccalaureate programs, National Board-certified teachers, transportation and Elevate Tuscaloosa programs will continue to receive local funding.
Like school systems across the state, funding comes from a variety of sources. TCS receives 46% of its revenue from the state, 42% from local sources and 12% from federal sources. Local revenue includes property, sales and automobile taxes, along with funding from the city of Tuscaloosa.
Duke pointed to successes in the city system as a result of financial support and the dedication of the system's educators. Among those improved outcomes are growth in reading and math proficiency, college and career readiness, verified post-high school plans and extracurricular participation.
Financial Pressures on Schools
System leaders anticipated the loss of federal COVID funds in 2024 and began taking steps in advance to mitigate the impact on the budget through reductions of personnel funded by the pandemic money and restructuring the district's reserve policy.
The proposed budget includes a $12.5 million drawdown in reserve funds in the wake of continuing financial challenges. That would leave some $27 million in reserves at the end of fiscal year 2027.
"That $12 million is definitely by design," Duke said. "Some of that is money that we've already got in the bank and that we'll have to spend by the end of FY27."
Education funding shortfalls have a direct impact because school costs increase 23% every five years, according to a TCS estimate. That is largely due to the ever-growing price for services and programs such as pre-K, summer learning, dual enrollment and workforce development.
Tuscaloosa schools are not alone in dealing with budgeting pressure for the coming financial year. School systems across the state report the 2024 loss of federal ESSER COVID relief funds, combined with declining enrollment and increased personnel costs, as major factors to overcome.
As if there weren't enough financial pressure already, TCS and other school systems, including Tuscaloosa County, are also reeling from voters rejecting ad valorem tax increases to support schools.
Voters in the city of Tuscaloosa exacerbated budget strain locally in 2024 when they narrowly defeated a proposed 11-mill property tax bump dedicated to TCS. Had it passed, the funds produced would have covered the reserve drop.
Of major concern is the decline in enrollment in the city system. The system's K-12 student enrollment for 2026 is 10,317, down from 10,509 in 2025. The decrease of 192 students is problematic because state funding is based on daily student attendance.
TCS projects ending the current fiscal year with enough general fund reserves to cover approximately three months of expenses. But by the end of FY27, that is expected to decline to 2.1 months.
Additional Help
TCS expects to receive approximately $3 million through the second year of Alabama's Renewing Alabama's Investment in Student Excellence Act, or RAISE Act. It is a legislatively passed K-12 funding law that creates a student-needs-based funding formula and adds weighted funding for specific student groups above foundation programs. RAISE Act funding provides new money but not enough to offset the loss of COVID funding dollars and the other funding pressures.
Duke praised the act and announced that the city will encourage lawmakers to continue funding it.
"That's been a really good thing for the Tuscaloosa City School System," Duke said during the budget reading.
The Tuscaloosa City Board of Education will vote on the FY27 budget proposal at Tuesday night's meeting. The fiscal year begins October 1.
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