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Atascadero Unified projects multiyear structural deficit; special education shortfall to cost district about $12.8 million next year
Summary
Chief Business Officer presented the district’s May-revised budget assumptions, warning of state revenue uncertainty, declines to the Proposition 98 guarantee, and a structural deficit driven in part by a growing special education cost gap that will require the district to subsidize roughly $12.8 million from the general fund in 2025–26.
Atascadero Unified Chief Business Officer presented the district’s 2025–26 budget preview on Tuesday, telling trustees that state revenue downgrades in the May revise and unfilled attendance (ADA) targets left the district with a structural deficit that extends across the next several years.
CBO Mrs. Darnell summarized the May Revised outlook and local implications: projected state revenues were downgraded since January, governor proposals and federal policy uncertainties increase risk, and Proposition 98’s minimum guarantee was reduced over a three‑year window. The district used the school-services May workshop forecasts to model multiyear projections.
The district reported 4,358 students enrolled at census day for 2024–25 and P‑2 attendance of 4,036.95 (about 92.6%). For 2025–26 the district projected a small enrollment decline to about 4,336 students and modest ADA growth tied mostly to expanded TK numbers.
Darnell said a potential student support and professional development discretionary block grant would have provided about $314 per ADA (roughly $1.2 million for Atascadero) but was considered “high risk” and was not built into the adopted revenue assumptions. A proposed TK add‑on was also considered high risk and excluded from revenue assumptions pending final state action.
The presentation highlighted that special education costs continue to outpace restricted reimbursements. For 2025–26 the district anticipates contributing approximately $12,800,000 from the general fund to special education — about 23% of unrestricted general fund revenues — a gap Darnell described as not sustainable long term without state or federal aid increases or local reductions in other programs.
Other budget drivers included payroll and benefits (the largest expense), contracted services, and capital outlay reductions in 2025–26 compared with the current year. The district noted some one‑time purchases this year (a bus and a truck) that reduce outlays next year. The district’s multiyear projections show continued deficit spending through 2027–28 under current assumptions, though reserves and prudent fiscal stewardship produced a positive certification for the budget cycle.
Board members asked for additional breakdowns and suggested follow‑up items: per‑student special education expenditure comparisons, advocacy at the state level for increased special‑education funding, and proposals for attendance recapture strategies (including independent study and expanded recovery programs) to increase ADA.
The board was told the same budget will return next week for formal adoption; staff noted that if high‑risk state dollars materialize they will be added at the 45‑day revision.
