Denver Public Schools is projecting a $28.6 million funding gap over the next four years, while district leaders warn more school closures are likely if enrollment decline further.

The district’s $1.5 billion proposed budget for next school year outlines a series of financial pressures — declining enrollment, uncertain state funding and rising costs — that district officials say will require new revenue to sustain current services.

Superintendent Alex Marrero told the board during a presentation on the proposed budget Thursday that additional school closures are expected as the district responds to declining enrollment and financial pressures, though likely not next school year.

“We are in a good financial position today,” Chief Financial Officer Chuck Carpenter said, noting the proposal reflects a balanced budget.

But, Carpenter said, that will change as DPS continues losing students and begins to feel the effects of “smoothing,” which averages pupil counts over three years. Smoothing has temporarily propped up funding despite the enrollment declines.

The proposed budget underscores the district’s push for a potential mill levy override, repeatedly pointing to long-term deficits and the need for new revenue.

If approved by voters in November, the mill levy override is expected to generate about $43 million annually.

In a January financial update to the board, Carpenter cautioned that a number of issues could pose financial challenges for the district, specifically uncertain state and federal funding. Those risks have not yet materialized.

District officials also raised worries over the state’s fiscal outlook, warning that future shortfalls could impact K-12 funding — the second-largest area of state spending behind Medicaid.

Lawmakers recently closed a $1 billion-plus gap in Colorado’s $46.8 billion budget through cuts to Medicaid, reductions in services and the use of reserves. The governor has also proposed additional reductions and signaled a pause in new school finance funding beginning in 2027–28.

Colorado public schools are funded through a mix of local property taxes, state revenues and federal funding.

That mix has shifted over the past two decades, with state support shrinking and property taxes comprising a growing share of the district’s revenue. The shift in the funding burden to local property taxes largely reflects Colorado’s school finance formula, which reduces the state’s contribution as local property tax collections rise.

About 17% of the district’s revenue comes from the state.

The push for a new mill levy override comes 18 months after district leaders told voters a nearly $1 billion bond in 2024 would not raise taxes. Now, the district’s proposed budget shows that sustaining current services will require new revenue.

Had taxpayers rejected the $975 million bond measure, Denver taxpayers could have saved about $20 million a year, as previous bonds mature, Carpenter has said.

A committee formed to review spending proposals is collecting community input in regional meetings through June 2.

The District Accountability Committee (DAC) cautioned in its budget recommendations that schools are already cutting teachers, paraprofessionals and mental health staff. The committee recommended increasing per-pupil funding and placing a tax measure on the ballot to ensure services are maintained.

The DAC is a state-required body comprised of parents and community members that is tasked with providing input on district spending and budget priorities.

School-level advisory groups — known as Collaborative School Committees, or CSCs — said they would overwhelmingly reinvest in staffing, based on a DAC survey of members that included parents, principals and staff.

That feedback led the DAC to conclude that “cuts to roles like paraprofessionals and interventionists were unavoidable, not strategic.”

District officials did not readily have information on the number of teacher layoffs.

DPS has been losing students.

Since 2023, the district has closed 10 schools and restructured three others to address declining enrollment.

Officials have cited lower birth rates, rising housing costs and gentrification as key drivers of the district’s enrollment declines.

The year-over-year decline was about 1,200 students in the fall, district figures show.

In December, Marrero told the board that enrollment losses now outpace what school closures alone can address — although more are expected.

It costs, on average, about $4.7 million to operate a school, according to the district. Depending on enrollment, those costs can range from roughly $2 million to nearly $20 million.

The move the board took 18 months to close seven schools and restructure three others gave the district about a $6 million net savings.

Taken together, these figures underscore why district leaders now point to boundary and enrollment changes as the next lever.

Typically, school districts will use school boundaries to address increases or decreases in student enrollment, overcrowding or underutilization, or when opening or closing schools.

Not DPS.

Instead — on Marrero’s recommendation — the board has shuttered campuses based on size and utilization, without revisiting attendance boundaries.

“The only thing that will turn this around is if birth rates level off or if there are families moving into the system,” Carpenter said.

Carpenter added: “I think for the foreseeable future, we should be probably planning for declining enrollment.”