Denver Public Schools is facing a potential financial “catastrophe” that its leaders say could trigger more school closures and job cuts, and require Superintendent Alex Marrero to dip into reserves to balance the district’s billion-dollar budget.
Officials with Colorado’s largest school district are sounding the alarm over what they call a three-pronged threat coming for DPS coffers: declining student enrollment, plus anticipated budget cuts at both the state and federal levels.
So far, only one of those threats has been realized. DPS is down 1,200 students — mostly immigrant children who had offset the impact of falling birth rates — and, in turn, will receive $18.5 million less annually in per-pupil funding. DPS enrolled 90,450 students last year.
A majority of the 1,200 students who left DPS after the last school year were new to the country, a loss Marrero attributes to the Trump administration’s mass-deportation efforts.
“If this is not evidence of how impactful ICE raids and threats are,” he said.
Uncertainty swirls around both the state and federal budgets and any potential reductions to K-12 funding. But DPS is also preparing for punitive action from the Trump administration because the district has refused to remove a handful of gender-neutral bathrooms.
“If that all happens, we’re in a whole heap of trouble,” Marrero said. “We’re in a place we haven’t been, I don’t think so ever, because we’ve never seen federal threats like this.”’
DPS could lose anywhere between $10 million and more than $100 million — the total amount the district receives — in federal funding alone, he said.
Falling enrollment and school closures
The most immediate budget concern — and the one the superintendent said district officials have the most control over — is the problem of falling enrollment.
DPS previously predicted an 8% enrollment drop by 2029, totaling 6,005 students. But the loss of 1,200 students this year was unexpected, after the district enrolled more than 4,700 new immigrant children and teens in the past three years.
The large loss in students, if coupled with what Marrero called “the other two legs of this potential catastrophe,” would lead him to recommend another round of school closures. If that happens, DPS would also be less likely to guarantee jobs at other schools for affected employees, as further job cuts would be necessary, he said.
DPS cut 38 central office positions earlier this year to save about $5 million annually. The district also closed or restructured 10 schools because of falling enrollment, which is expected to save about $30 million a year.
The Board of Education put a four-year hiatus on school closures this year, but Marrero can bring forth a new recommendation if there’s a “substantial shift” in enrollment or an emergency, according to the policy.
“It’s a very brutal process — not anything that I’m interested in doing ever again, but I also have to respond accordingly,” Marrero said. “If I can’t balance the budget because we’re running ineffective systems and there aren’t students in certain schools — so that’s going to trigger an activation (of the policy), for sure, if we have all three scenarios.”
Whether the school board will approve any additional closures remains to be seen. The makeup of the board could change significantly after the Nov. 4 election, and many of the 11 candidates said during a debate Tuesday that they would not vote to close schools despite falling enrollment.
‘Some hard choices for next year’
Marrero would also need the school board’s approval if he wants to use more than 10% of DPS’s reserves to balance the district’s budget.
The district’s financial forecasts are more likely to show DPS running a deficit as the need to use reserves grows, including for the 2026-27 academic year, said Chief Financial Officer Chuck Carpenter.
“We should be preparing for that,” he said.
Carpenter said he feels comfortable with where things stand with the 2025-26 budget. But by the time budget season rolls around in January, DPS leaders are likely to start considering what cuts — if any — they need to make to staff or educational programs for the 2026-27 academic year, he said.
“It seems very likely we are going to have to make some hard choices for next year,” Carpenter said.
DPS is not the only district facing financial headwinds. Metro districts began tightening their belts months ago, such as by pulling back on teacher raises.
But the potential amount of money that districts stand to lose is larger than was expected even a few months ago, Carpenter said. DPS lost 800 more students this year than expected, he said.
“The acceleration of declining enrollment is a real thing,” Carpenter said.
K-12 enrollment is falling statewide as fewer Coloradans give birth, and public schools receive less state funding when fewer students are in their classrooms.
State, federal budget cuts loom
The prospect of both state and federal budget cuts is also creating a lot of uncertainty about how much money districts will receive for the 2026-27 academic year.
DPS officials won’t know until Nov. 1, when the governor releases his proposed state budget, what potential cuts might be coming for K-12 education, Carpenter said.
State legislators are already looking at needing to fill a nearly $1 billion budget deficit.
“The concern, in general, is the economy’s slowing down,” he said. “That’s going to impact the state’s budget.”
A budget proposal in the U.S. House of Representatives has recommended eliminating or cutting money that schools use for teacher training and to serve English language learners and students with disabilities. If passed, it could mean DPS receives at least $14 million less in federal funding. (This doesn’t include any cuts made by the Trump administration because DPS has a small number of multi-stall, gender-neutral bathrooms, which the government says are discriminatory against girls.)
The Trump administration over the summer withheld some of the federal funds now on the chopping block — about $70 million — that Colorado schools expected to receive for the 2025-26 academic year. The administration finally released the money, but not before districts began weighing staffing and program cuts.
“The Trump administration has had this entire all-out war on education,” said Rob Gould, president of the Denver Classroom Teachers Association.
This summer, the teachers union agreed to a new contract that gives educators smaller raises than in years past because of district officials’ concerns about federal funding cuts, he said.
“We know we have to weather the storm,” Gould said.
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