Burbio School Tracker 6/30: The Squeeze and The Spend

1. In recent newsletters we have taken a district-by-district approach in examining budget-making in K-12 heading into 2026-27. This week we take a wider view as we summarize challenges and priorities across dozens of the largest districts' budgets. First, the largest cost drivers in school district budgets:

• Personnel compensation. Salaries and employee benefits remain by far the largest expenditure, typically accounting for 70% to more than 80% of general fund budgets. Districts continue to prioritize competitive compensation to recruit and retain teachers and staff.
• Employee benefits and retirement costs. Rising healthcare premiums, pension contributions, and other employee benefit obligations continue to increase faster than general inflation, placing additional pressure on district operating budgets.
• Special education services. Districts are reporting higher costs for specialized instruction, related services, out-of-district placements, paraprofessionals, and transportation needed to support students with individualized needs.
• Student transportation. Transportation expenses continue to rise due to higher contract costs, increased demand for specialized transportation, labor shortages, and fuel prices.
• Facilities operations and maintenance. Utility costs, building maintenance, custodial services, deferred maintenance, and aging infrastructure remain budget pressures as districts work to maintain school facilities.
• General operating inflation. Higher prices for instructional materials, technology, food service, classroom supplies, software, insurance, and contracted services continue to increase the cost of day-to-day district operations.

Overall, districts are facing the challenge of managing steadily rising operating costs while maintaining staffing levels and student services, often with limited revenue growth, and many districts continue to cite the expiration of federal pandemic relief funds as an issue in budgeting.

Further below, we discuss the major areas of investment.

2. Burbio's K-12 Construction Tracker follows school construction projects from early discussion through completion providing district-level visibility into projects long before plans, budgets, or RFPs are finalized. In the chart below we compare the mix of projects classified as New Builds, Renovations, Additions, and Facility Refreshes. Just under half of projects are new builds, and just under 40% are renovations:

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3. Below, we add to some previous analysis and drill down to the mix of construction projects in the top fifteen states plus New England. The differences across states are material. Note that states in the Northeast, plus Illinois, have a lower percentage of new builds than states in the Sun Belt, West, and other pockets of the Midwest."

4. Even as districts are facing budget pressures, we are seeing consistent areas of investment. Here are the highlights:

• Career and Technical Education (CTE). Districts continue to expand CTE pathways, regional career centers, workforce partnerships, and industry-recognized credential programs to strengthen career readiness and prepare students for high-demand occupations.
• Early Literacy and Core Instruction. Districts are investing in evidence-based curriculum, literacy initiatives, instructional coaching, and academic intervention programs designed to improve student achievement and close learning gaps.
• Attendance, Mental Health, and Student Supports. Districts are making investments in chronic absenteeism initiatives, school counselors, behavioral health professionals, MTSS interventions, and mental health services, designed to improve attendance and deliver supports for students with academic and behavioral needs.
• School Safety and Security. Investments continue in both physical and digital security, including campus access controls, weapons detection systems, school resource officers, emergency preparedness, and cybersecurity infrastructure.
• Facilities Modernization. Districts remain focused on modernizing aging facilities through capital projects that address deferred maintenance, HVAC systems, roofs, classroom renovations, and other infrastructure improvements.