While New York City public school principals await the fiscal fallout from a state mandate for smaller classrooms, some are seeing their budgets drop already because of declining enrollment at their schools.

Mayor Eric Adams' administration has been clear that it plans to “rightsize” the budgets at schools where enrollments have gone down, arguing that schools with fewer students require fewer resources. Principals received their initial budgets this week and are still digesting the impact.

“What I am hearing is that they are beginning to feel the effect of register loss,” said Mark Cannizzaro, president of the Council of School Supervisors and Administrators.

When explaining the city’s plan for enrollment-related cuts, Adams administration officials promised to soften the blow by using federal stimulus funds to phase in the changes over the next two years. That means schools will still be getting more money for next fall than they would have, purely based on their enrollment, but less than they received this year.

Some education advocates said they are alarmed that budgets are being reduced at all as students and staff are struggling to recover from the pandemic.

Just a few days ago, Leonie Haimson, the executive director of the advocacy group Class Size Matters, was celebrating new bills that would make classes at public schools substantially smaller.

She said she can’t see how schools will be able to meet those new targets if many are getting less funding next year.

“​​Once they cut the budgets like this, class sizes will inevitably go up,” she said. “And it’s going to be much more difficult and expensive in the future to comply with the law.”

Cannizzaro said one thing is clear: there’s no additional funding to reduce class size at this point. Instead, some schools with declining enrollments may have to combine and increase classes, while others could make cuts elsewhere.

“They’re going to have to excess staff,” he said. “If you have significantly fewer students, you need significantly fewer teachers.”

The class-size legislation is now awaiting Gov. Kathy Hochul’s signature, but Adams has said the bill would lead to further cuts in school budgets for social workers, counselors, dyslexia screenings, trips and after-school programs in order to pay for reduced class sizes.

“We don’t have that money,” the mayor said this week. “And we’re in a fiscal crisis.”

School budgets are mostly based on how many pupils those schools serve, and the needs of those students, including poverty level, special education needs and more.

And the number of students attending the city’s public schools has been going down, especially during the pandemic. Officials said enrollment declined by 4% this year.

Enrollment changes have varied across the system this year, data shows.

But during the last two years, the city used stimulus funding to “hold schools harmless” despite enrollment declines — meaning their budgets did not shrink even though they were serving fewer students than before.

The Adams administration said it’s time to bring budgets closer to reflecting schools’ true enrollment numbers, although the mayor has said he hopes schools will see their enrollments rise in the coming years.

City Hall did not respond to a request for comment about reduced school budgets.

Multiple administrators told Gothamist they are still paging through financial documents to understand the impact.

The current budgets are based on enrollment projections; administrators will be able to appeal or adjust their allocations once their rosters are finalized in the fall.