The 100 largest school districts in the country carry roughly $1.27 trillion in reported liabilities between them. Two districts stand out at the top of the list, one in metro Atlanta and the other in metro Houston.
The August 20 report, from the Reason Foundation, a libertarian think tank, scored the largest districts against eight standardized financial measures drawn from their audited annual reports, assigning a red flag each time a district missed a benchmark. Fort Bend Independent School District in Texas triggered seven of the eight, the worst score in the country. Gwinnett County in Georgia triggered six, the second-worst in the country.
Red flags of the largest school districts
Figures are from the close of the 2023 fiscal year, as reported by the districts themselves. Enrollment is from federal data.
| District | State | Red flags | Liabilities per student |
|---|---|---|---|
| Fort Bend ISD | Texas | 7 | $29,690 |
| Gwinnett County | Georgia | 6 | $31,918 |
| Chicago Board of Education | Illinois | 5 | $93,669 |
| Frisco ISD | Texas | 5 | $45,882 |
| Denver Public Schools | Colorado | 5 | $44,791 |
| Omaha Public Schools | Nebraska | 5 | $42,327 |
| Los Angeles Unified | California | 4 | $69,512 |
| Miami-Dade County | Florida | 4 | $19,275 |
| Baltimore City | Maryland | 0 | $7,072 |
| Rutherford County | Tennessee | 0 | $2,822 |
Fort Bend, which serves about 79,700 students southwest of Houston, reported $2.37 billion in liabilities against $2.05 billion in assets, meaning its debts exceeded what it owns by about 15%. Its unrestricted net position was negative $603 million, cash made up just 5% of assets, and it was one of only seven large districts that spent more than it took in that year.
Gwinnett, Georgia's largest district at about 182,500 students, reported $5.80 billion in liabilities against $4.08 billion in assets and an unrestricted net position of negative $2.09 billion. It spent $66 million more than it collected in fiscal 2023, a deficit of $364 per student, and held less than 5% of assets in cash. It did clear the short-term liquidity bar, with enough cash on hand to cover bills coming due.
At the other end, only two large districts triggered no flags at all: Baltimore City Public Schools, with $516 million in liabilities against $2.45 billion in assets, and Rutherford County Schools in Tennessee, which carries just $2,822 in liabilities per student and the healthiest liquidity position on the list.
What the red flag means
The Reason Foundation report is careful to put its findings in context. A headline such as "seven of eight districts triggered warning signs" can make it sound as though those districts are on the verge of missing payroll. They are not. The authors describe each flag as evidence of a structural weakness that warrants attention and not proof of an immediate financial crisis. Several districts with multiple flags remain flush in the short term: Frisco ISD triggered five while holding 28% of its assets in cash, and Chicago triggered five despite maintaining healthy liquidity. Most of the flags concern long-term balance-sheet risks, not the ability to pay next month’s bills.
The most common flag by far is a negative unrestricted net position, which 83 of the 100 largest districts trigger. That near-universality is the most important context in the whole report. A big share of it comes from how districts must report pension and retiree health obligations, promises that come due over decades, on today's balance sheet. It reflects a nationwide accounting and pension reality more than it identifies 83 badly run districts. The next most common flags are carrying more than $20,000 in liabilities per student, which 57 districts trigger, holding more debt than assets, which 31 trigger, and keeping less than 10% of assets in cash, which 27 trigger.
It also matters who is defining the warning signs. The Reason Foundation is a libertarian organization that generally favors limited government spending, and benchmarks such as the $20,000-per-student liability threshold are standards chosen by the organization, not legal or accounting requirements. That does not invalidate the underlying figures, which come directly from districts’ audited financial reports. But deciding which figures qualify as red flags is an editorial judgment, and readers should interpret the findings accordingly.
Why this matters for families
The practical link is that districts carrying heavy long-term obligations have less room when revenue tightens, which is when programs, staffing, and buildings come under review. We have watched that play out this year in Los Angeles, facing a $231 million shortfall, in Minneapolis, and most dramatically in Dublin, Georgia, where the state suspended the entire school board over a $20 million hole.
There is also a fairness question buried in the geography. Twenty of the 100 largest districts are in Texas, and they span the full range from one red flag to seven, so this is not simply a story about one state's rules. Much of the variation traces back to how districts are financed in the first place, since a district's budget depends heavily on its local property tax base and how generously its state redistributes money. For families in Gwinnett specifically, the district's size and finances sit behind our closer looks at its enrollment and demographics.
Sources
Reason Foundation: State and Local Government Finances, school districts
Reason Foundation: full report (PDF)
Enrollment figures from allk12's analysis of National Center for Education Statistics (NCES) data, 2024-25.
