Faced with annual budget cuts since becoming a unified district in 2013, Shelby County Schools has managed to keep most cuts from directly impacting classrooms.

Next school year will be different, says Superintendent Dorsey Hopson.

“There’s nowhere else to cut but the classrooms,” Hopson warned board members last week as he stared at an $86 million projected shortfall for the fiscal year that begins July 1.

This Wednesday, Hopson will outline his proposed cuts during a school board work session, kicking off a two-month process to hone the district’s spending plan. District leaders are scheduled to present their 2016-17 budget on May 25 to the Shelby County Commission, which approves local funding.

Here are five things we know going into the process:

  1. The next round of cuts are likely to be the most painful yet. On its studentsdeservemore.com website launched last week, the district offered an eight-point list of potential cuts, including decreasing teacher benefits, eliminating assistant principal positions at smaller schools, and closing more schools. Also on the table: fewer summer school courses, decreasing pay for substitute teachers, and shrinking the maximum distance for students receiving bus transportation.
  2. The starting numbers have gotten worse, not better, though they’re still better than where the process began last year. Next year’s shortfall, projected last fall at $72 million, is now up to $86 million. Hopson already has identified $50 million worth of cuts, leaving a gap of $36 million to address. This time last year, the district faced a deficit of $125 million, which it resolved through cost-cutting measures such as eliminating 482 positions and outsourcing services such as maintenance.
  3. Much of the cost-cutting is being driven by shrinking enrollment. And enrollment — and the money that follows it — are getting harder to predict. In 2013, the newly merged district had nearly 150,000 students, but enrollment is now at 110,000. The district took a large hit in 2014 when six suburban municipalities seceded from Shelby County Schools by creating their own school systems. It’s also steadily lost students to the state-run Achievement School District, which has taken control of 27 low-performing Memphis schools since 2011 and will add four more next fall. In addition, Memphis has a high rate of mobility. To address the student shrinkage, 20 Memphis schools have been shuttered since 2012, and the board recently voted to close another school next year due to under-enrollment. District staff also are developing a five-year school closing plan to present to the board next fall.
  4. And it doesn’t help that the $90 million grant from the Bill & Melinda Gates Foundation is scheduled to dry up this year. Since receiving its first check in late 2009, the district has received quarterly payments from the landmark grant to support its teacher and principal quality improvement work. But with the last of that money due to be allocated this year, the district must decide whether or how to continue that work. Potentially exacerbating the situation, Gov. Bill Haslam has proposed changes to the state’s education funding formula that could decrease state money that the district has enjoyed to boost teacher salaries because, locally, private sector wages significantly outweigh government job wages. Last year, Shelby County Schools received almost $31 million for that purpose.
  5. The final budget will almost certainly look different from the starting point. Hopson is expected to recommend that the board ask the County Commission for increased local funding — again. And, in an unprecedented move, the district has developed a website as a hub for rallying employees, parents and community members to advocate for additional funding from both the county and the state. Last year, the board received about half of the additional $14 million requested from the county, on top of its regular allocation based on the funding rate. At the time, commissioners grilled administrators about their spending habits and expressed frustration that local governments are increasingly being asked to pick up the slack for the state when it comes to adequately funding schools. That sentiment doesn’t appear to have changed. Asked about the prospects of the commission voting to fund this year’s $36 million gap, David Reaves, the commissioner’s education committee chairman, offered a quick summation. “Highly unlikely,” he said.