Seattle Public Schools (SPS) has released its proposed 2025-26 budget, balancing a previously projected $104 million deficit without closing schools or cutting classroom services. The district’s General Fund budget totals $1.35 billion for the upcoming school year.

To bridge the gap, SPS relied on several one-time measures and increased revenue:

• $89.9 million drawn from existing fund balances. This reflects money the district had saved from prior years, including unspent funds carried forward from 2023-24, leftover school and department budgets, and unrestricted reserves. Much of this is one-time money that won’t automatically replenish.
• $11 million from a partial extension of an interfund loan, borrowed from the capital fund. This internal borrowing shifts money from funds normally reserved for building projects to help cover operating expenses. While allowed temporarily, these loans must eventually be repaid and cannot permanently fund ongoing costs.
• New state funding from the 2025 legislative session, including higher allocations for special education, transportation, and materials.
• Additional local tax revenue, thanks to a state-approved increase in levy authority.
• Further reductions to central office spending.

The district preserved current class sizes, avoided layoffs, and maintained discretionary funds for schools. It also allocated $2.3 million in new spending for safety and security.

The budget release comes after months of public debate over potential school closures. Earlier this school year, SPS considered consolidating some of its under-enrolled elementary schools to save money, citing unsustainable enrollment levels and state funding formulas based on larger school sizes. However, strong community pushback led the district to postpone closures for now.

While SPS was able to balance the 2025-26 budget, officials warn that many of the solutions are temporary. Fund balances have been heavily depleted, and future borrowing options are limited. Without additional state funding or systemic changes, the district faces a persistent structural deficit heading into 2026-27 and beyond. Long-term financial stability may require renewed conversations about school consolidations, staffing levels, or new revenue sources.