Kalamazoo Public Schools presented its preliminary budget for the 2026–27 school year at the June 11 Board of Education meeting, projecting a balanced general fund with modest growth in state revenue — but continued pressure from inflation that has outpaced school funding for years.
Finance Director Laura Kayser presented the budget overview to the board. The public hearing on the proposed budget is scheduled for the board’s June 25 meeting, after which the board may adopt it. Until then, the preliminary budget is available for inspection by appointment at the KPS administration building at 1220 Howard Street.
The Revenue Picture
State funding — including property taxes built into the state aid formula — makes up 87.4% of KPS revenues. That dependence on Lansing means the district’s financial health is closely tied to decisions made in the state budget process.
The good news for 2026–27: all three state budget proposals — the Governor’s, the House’s, and the Senate’s — agreed on a 2.5% increase in the per pupil foundation rate, raising it by $250 to $10,300. Kayser called the alignment across all three proposals “very unusual.”
The less good news: Michigan’s projected inflation rate for the upcoming year is 3.2%, meaning even with the increase, per pupil funding will continue to fall behind the cost of running schools. Cumulatively, KPS has lost approximately 34% to inflation over the period tracked in the district’s budget analysis.
Enrollment: A Bright Spot
Enrollment is projected to remain essentially flat for 2026–27. The flat projection comes in the context of declining birth rates statewide — making the prior year’s outcome especially notable. Secretary Carol McGlinn highlighted the contrast at the meeting: KPS had budgeted to lose 149 students in 2025–26 and instead gained 157. “We projected those numbers knowing birth rates are going down, yet we’re still building up our student count,” McGlinn said.
Cost Pressures
Eighty-two percent of district expenditures go to employee salary and benefits, making KPS highly sensitive to cost changes in those areas. Major budget pressures for 2026–27 include:
- Health insurance costs projected to increase 10%, adding $1.64 million
- Fuel, utilities, and contracted custodial and grounds costs up $337,000
- Property and casualty insurance up $50,000
- Elimination of a one-time MPSERS retirement revenue payment of $1.26 million received in 2025–26
These pressures are partially offset by attrition savings — the estimated difference between retiring higher-paid employees and the lower-paid employees who replace them — projected at $1.05 million.
New Investments
After budget reductions and transfers totaling approximately $2 million, the district identified $4.14 million available for new investment. Key additions include:
- A new cybersecurity position to protect district technology systems
- Funding for high school students to participate in national academic competitions, including mock trial and DECA
- Additional elementary instructional intervention teachers (formerly the reading recovery program)
- Two middle school strategic ELA and math teachers
- Two additional home support specialists
- Compensation adjustments including step-level increases and a projected 1.8% base pay increase, subject to negotiations
A reserve fund for the Career Center is also included in the budget structure.
Federal Funding Note
Title II-A coordinator funding — which supports teacher professional development — was threatened with cuts in 2025–26 but was ultimately restored. For 2026–27, 0.7 coordinator positions are being funded with Title II-A federal funds, a budget efficiency that helps free up general fund dollars.
Fund Balance
KPS’s projected fund balance for 2026–27 is 19.62% of expenditures — below the state average of 25.35%. Kayser noted the district has not needed to borrow for cash flow since 2021, saving between $200,000 and $300,000 annually in interest costs. The fund balance represents just over two months of the district’s average monthly payroll and accounts payable obligations of approximately $18 million.
The district has held its fund balance essentially flat over several years — a sign, Kayser said, of consistent budget discipline. Looking ahead, she noted the district will need to continue focusing on enrollment growth, pursuing additional funding sources, and advocating for the state to fund schools more equitably relative to actual costs.
New Kitchen Opens the Same Day
On the day of the board meeting, KPS held a ribbon cutting for a new district food distribution kitchen — a facility Dr. Darrin Slade described as “years in the making.” The new kitchen is designed to improve both the quality of food served across the district and the operational efficiency of KPS’s food service division. Karen Jackson, Director of Facilities, and Kim Morey, Resident District Manager of Food Services, were credited for their work on the project.
The public hearing on the KPS 2026–27 budget is scheduled for the Board of Education meeting on June 25. The preliminary budget is available for inspection by appointment at 1220 Howard Street, Kalamazoo.
