How is the $27.6 billion state budget shortfall affecting local school district budgets?
After the state revealed a $27.6 billion budget shortfall and a projected deficit of $28.4 billion next year, school districts across the state — and the Coachella Valley — are tightening its belts.
These new challenges come as school districts are already grappling with several fiscal challenges such as inflation, the expiration of COVID-19 relief funding and declining student enrollment — particularly in areas where birth rates have fallen and high housing costs make it difficult for families to buy homes.
The following highlights are projections the local K-12 school districts, made for its proposed budget for the 2024-25 fiscal year based on state information available in late June.
More: 12 Coachella Valley school board seats up for election in November; filing period opens July 15
Newsom calls for low cost-of-living adjustments for K-12 school districts
Gov. Gavin Newsom's multi-year strategy does not propose major cuts for schools, but a low cost-of-living adjustment of 1.07% for school districts further creates budget pressure. The state's Local Control Funding Formula — or LCFF, for short — channels more money to students with the greatest needs, such as English learners, foster youth and those from low-income families. Consequently, districts receive different amounts of LCFF funding.
In addition, districts where enrollment has declined are facing bigger shortfalls because funding is tied to average daily attendance. The net result is that school districts must make tough decisions to balance its budgets while preserving educational programs that support its forthcoming goals outlined in each district's Local Control and Accountability Plan.
The proposed budgets serve as preliminary blueprints for revenues and expenditures because the final state budget was enacted after the preparation of the adopted budgets. Budgets involve ongoing cycles of planning, updating and reporting. Throughout the fiscal year, updates to the initial budget occur and are officially adopted with the first and second period interim financial reports.
Declining enrollment in Coachella Valley schools poses threat to funds
Coachella Valley Unified School District approved a $356.8 million budget for its combined general fund. Of this total, $171.9 million will come from LCFF funding.
During the last few years, districts have benefited from having pre-pandemic enrollment numbers included in a three-year rolling average that the state used to distribute funding. However, as enrollment declines in the next few school years, LCFF funding could also decrease.
CVUSD's enrollment for the 2024-25 school year is projected at about 15,646 students, continuing a steady decline from recent years.
“This is a big piece in our story,” said Mayela Salcedo, CVUSD’s assistant superintendent of business services. “How do we increase our revenue? This is where we’re going to focus. We want kids to be in the classroom. However, many students we have, it’s about them actually being 100% of the time in the classroom. Because that’s what gives us additional revenue.”
Salcedo said that if the school district increased its current attendance rate from 90.71% to match the 94.27% rate from the 2021-22 school year, it would boost the district's revenue by 5%, equivalent to approximately $5 million.
More: Coachella Valley Unified faces layoffs as federal pandemic-era relief funds come to an end
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Also in late June, Desert Sands Unified School District approved a budget of $479.8 million. Of that total in the district's combined general fund, $338 million will come from LCFF funding. The district projects enrollment for the upcoming school year at 23,530 students, also a decline from recent years.
Jordan Aquino, DSUSD's assistant superintendent of business services, added that the major pressure on the budget are the fixed costs, which are not controllable — like the salary schedule, pension costs and utility expenses.
“So what we need to do as a district is to be very cognizant in making sure that we’re monitoring our fiscal health, which is a combination of spending down our fund balance. We don’t want to have and keep this high fund balance. It’s great for business ... but it doesn’t show that you’re using your resources for students, for improving education," he said. "We have to be very mindful of our ongoing revenues, our ongoing expenses and how we can balance all that."
Palm Springs Unified School District approved a combined general fund budget of $403 million last month. Of that total, $303.4 million comes from LCFF funding, also less than years past.
Jeff Simmons, PSUSD's assistant superintendent of business services, said the district is re-evaluating vacant positions to better align staff allocations with declining enrollment. (PSUSD expects more than 19,200 students for the upcoming school year.) The district also reduced department and site budgets by 10%.
Voters living within the district's boundaries will also decide in the Nov. 5 election whether or not to approve $465 million in bonds to repair and modernize the district's school facilities.
More: Palm Springs Unified School District seeks voter approval for $465 million school bond
How can communities stay informed about PSUSD, DSUSD and CVUSD budget decisions?
Local families and community partners actively shape school budgets by providing feedback and participating in various ways, whether it's through formally sharing input for a district's Local Control and Accountability Plan — which outlines funding priorities — as well as attending school board meetings and public hearings.
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When are the next school board meetings?
CVUSD will hold its next board meeting at 5:30 p.m. on Thursday, Aug. 8 at the district's boardroom at 87-225 Church St. in Thermal. CVUSD also livestreams its board meeting on Zoom at this link: cvusd-us.zoom.us/j/84773737777
PSUSD will hold its next board meeting at 6 p.m. on Tuesday, Aug. 13 at the district's board room at 150 District Center Drive in Palm Springs. PSUSD also livestreams its board meetings on YouTube at this link: youtube.com/PSUSDLive
DSUSD will hold its next board meeting at 7 p.m. on Tuesday, Aug. 13 at the district's board room at 47-950 Dune Palm Road in La Quinta. DSUSD also livestreams its board meetings on YouTube at this link: youtube.com/DSUSDLive
Jennifer Cortez covers education in the Coachella Valley. Reach her at jennifer.cortez@desertsun.com.
This article originally appeared on Palm Springs Desert Sun: How is California's budget shortfall affecting local school districts?
