Highlights
- Colorado’s economic outlook has worsened since December, and future school funding will likely face ongoing pressure despite short-term fixes.
- PSD still faces declining enrollment (fewer students and ~10,000 empty seats), requiring budget cuts and possible school consolidation.
- The district has already taken proactive steps to reduce costs, putting it in a relatively strong position — but more reductions are expected.
- The state budget is still evolving, with clearer impacts and PSD’s finalized budget decisions coming by June 2026.
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Last evening, the Board of Education received an informational report on the State of Colorado’s budget outlook for the 2026-27 school year based on the state’s March economic forecast. I want to share with you what we know, what is still developing, and what comes next.
Our Enrollment Reality Has Not Changed
Before jumping into what we are learning from the state, it is important to keep in mind that PSD’s reality remains unchanged. We still have approximately 10,000 empty seats across our district, and we are projected to have 654 fewer students in our schools next year. That decline requires us to adjust our budgets to align with the actual number of students in our schools.
What We Are Learning from the State
The State of Colorado recently released its March economic forecast, which is informed by two different financial outlooks: one prepared by the Office of State Budget and Planning and the other created by Legislative Council Staff. These forecasts vary significantly, both agree on one thing: the state’s financial outlook has gotten worse since December.
The governor's proposal for balancing the state budget in light of these forecasts includes one-time funding sources, such as the state's reserves. When the state uses reserves to balance its budget today, that money is no longer available tomorrow, and ongoing reductions are still anticipated in future years. I want to be direct: the state's use of one-time funding to close a budget gap may soften the landing for next year, but the underlying issue is not going away. We should expect continued pressure on school funding in the years ahead.
PSD Is Well-Positioned
The work we have done over the past few years to proactively plan and reduce costs is positioning PSD to weather this storm. We did not wait for a crisis to begin before making difficult decisions. We have been planning ahead, and that preparation matters now more than ever. That said, we anticipate needing to continue making reductions as we plan for the future.
What Comes Next
Last evening's presentation focused on interpreting the state’s budget forecast. It is important to note that the state budget will continue to evolve over the coming months, and we will continue to adapt and keep you informed every step of the way.
At our next Board meeting on April 14, we expect to have more clarity on what the state’s budget proposal means specifically for PSD and we will share an update on those anticipated impacts. We will then present a preliminary budget to the Board of Education on April 28, a proposed budget on May 12, and a final budget after the state legislature concludes its work later in May. The district is required to adopt its final budget no later than June 30, 2026.
I want to emphasize that even as these external factors develop, our local reality remains clear: declining enrollment requires us to align our resources to the number of students we serve and that means potentially consolidating schools. PSD remains committed to strong fiscal stewardship, especially during difficult times, and that means making responsible decisions now to protect the quality of education our students and families depend on. That work continues and it is the right work to be doing.