Sweetwater staff present preliminary 2025–26 budget: multi‑year deficit projected, federal funding risks cited

Sweetwater Union High School District staff presented the preliminary 2025–26 budget to the board on June 9, outlining assumptions, multi-year projections and fiscal risks.

Chief presenters said the district built the draft budget with updated state assumptions and noted a cost-of-living adjustment (COLA) estimate that changed during the May revisions. Staff told trustees the district is projecting a structural deficit in 2025–26 and into the following years if current assumptions hold. The presentation showed a projected carryforward in 2025–26 tied largely to LCAP unspent dollars (staff estimated roughly $55 million in LCAP carryover), and a projected structural shortfall (spend down) of roughly $52–53 million in subsequent years under current assumptions.

Finance staff flagged several risks: the federal budget could eliminate or reduce Title II, III and IV allocations (examples cited in the presentation included roughly $1.1 million for Title II, $800,000 for Title III and $600,000 for Title IV in reductions if not funded), and the adult education fund carries an expected receivable of about $1.1 million that could affect its fund balance if not received. Staff also noted the state’s mid‑May budget actions included some deferrals (a roughly $45 million apportionment deferral into July 2026) and that the proposed discretionary block grant and learning-recovery funds were subject to ongoing negotiations.

Staff presented enrollment and attendance assumptions (three‑year average unduplicated percentage around 62% and average daily attendance around 92%) and said the district’s multi-year projections assume flat enrollment beyond the near term. The presentation included cash projections that showed no immediate borrowing would be required; staff projected roughly $147 million cash on hand at the end of next year under current assumptions. The adult school (Fund 11) was cited as having a projected $3 million balance that is sensitive to federal receipts.

Staff described next steps: returning on June 23 for budget adoption, incorporating any final state budget changes on Aug. 11 under the 45‑day provision if needed, and certifying unaudited actuals in September when final numbers are available.

Trustees asked questions about uncertainty and the district’s reserves; staff and the superintendent said having multi-year reserves has provided time to plan, but emphasized enrollment and federal/state funding remain the largest variables.