On Dec. 4, Little Rock School District staff presented a data‑driven briefing to the board outlining preparations for the fiscal year 2026–27 budget and warned of a planning range of $12 million to $15 million in operating reductions.

The presentation, led by district budget staff and school‑operations leaders, emphasized that what is being presented “is not recommendations” but rather “ideas and things that we have thought about,” said a district presenter. The briefing traced revenue and expenditure trends over a 10‑year window, noting enrollment declines and a substantive shift in the district’s revenue mix: state aid tied to enrollment has fallen while local property‑tax revenue has risen, producing higher total dollars even as costs—especially personnel costs—have increased.

Why the gap has widened: staff said personnel expenses are the largest single driver of the district budget. Although staffing totals are lower than in 2017, FTEs and salary steps remained elevated relative to the smaller student population, and required employer retirement and benefit costs have increased. The district also cited inflationary pressure across goods and services since 2017.

Officials called attention to two one‑time sources that have obscured longer‑term trends. The fund balance rose substantially in 2017–18 after a desegregation‑settlement payment (cited in the presentation as roughly $37 million that was earmarked for capital projects and used for construction), and then again in 2021–22 due to federal COVID relief (ESSER/CARES) and favorable debt‑service timing. Staff emphasized those were anomalies, not recurring revenue streams.

Special education and transportation were singled out as structural cost pressures. The district reported its special‑education share rose from about 12% in 2017 to about 18% in 2025, and said total SPED spending is substantially higher than state SPED revenue—staff summarized that the district spends roughly three times the state funding it receives for some SPED functions. Transportation costs were described as large and relatively inflexible; a typical bus route was cited at roughly $86,000–$90,000 annually, with contractor driver shortages pushing costs higher.

Staff quantified the next‑year revenue and expense pressures the board should plan around. Presenters estimated roughly $9.9 million in lost state foundation funding tied to projected enrollment decline and pointed to an approximate $4 million increase in debt service tied to recent debt issuance. The district therefore described about $14 million of combined negative pressure and proposed planning reductions in the $12–15 million range for FY27. The board clarified that the intent of those reductions is not only to balance operating results but also to rebuild the fund balance modestly—staff said the plan seeks to add roughly $2 million to $2.5 million to reserves over the next couple of years.

Staffing guidelines and proposed operational changes were introduced as levers to produce savings. Miss Burgess, presenting a draft staffing formula, said the district is proposing higher enrollment thresholds for receiving assistant principals at some priority schools and that class‑size targets for priority K‑8 schools would be aligned to statutory ratios (kindergarten 1:20; grades 1–3 at 25; grades 4–5 at 28 in the draft). She described the draft as subject to further feedback from staff, certified and classified associations, PPC, principals and the student advisory council.

Board members pressed on the instructional implications of larger classes and fewer site administrators, particularly in priority schools with higher concentrations of students with intensive needs. One board member asked how teachers are being consulted and urged the process be finalized only after robust stakeholder engagement; another asked that staffing recommendations be advanced earlier in the staffing‑round calendar so employees are not left waiting into later rounds.

On compensation, the board discussed targeted approaches in lean years. Staff said the compensation committee has considered bonuses for specific employee groups—board members noted proposals such as modest one‑time payments ($500–$1,000 for certain top‑step employees) rather than broad salary increases as the district sequences through difficult budget years.

Process and next steps: staff outlined a public engagement and review timeline that includes additional feedback meetings through mid‑January, a board update on Jan. 22, and a request to approve staffing guidelines in January so recommendation rounds can proceed. Staff said a final reduction plan would be presented to the board in an April work session with any action expected later that spring. The district also said it will share the annual snapshot financial report to the public and press as required by state rules.

Separately, a board member urged an external operational audit (procurement, contracts, HR and the recent cuts) in addition to the legislative audit underway; staff acknowledged legislative audits are thorough but said a targeted outside review could be scoped.

The briefing closed with several board items for future agendas—gym naming logistics, an investigation of reported missing items at an elementary school, and a staff briefing on a recent high‑school game incident—and an invitation to two weeks of student holiday performances in the boardroom.

The board did not take formal votes on budget items during the Dec. 4 briefing; staff said many proposals remain drafts subject to stakeholder feedback before any board action.