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Superintendent presents recommended FY 2025–26 budget and $113.9M in reductions under fiscal stabilization plan
Summary
Superintendent Hsu and finance staff presented the 2025–26 recommended budget on June 17, incorporating $113.9 million in reductions from the district fiscal-stabilization plan while shifting a larger share of spending to schools.
Superintendent Hsu and the district finance team presented the recommended fiscal year 2025–26 budget to the board on June 17, saying the plan incorporates previously announced reductions totaling about $113.9 million and that the budget shifts more resources to schools while maintaining a recommended unrestricted fund balance.
Hsu framed the budget around three priorities: strengthen student learning, ensure schools are well staffed and supported, and restore system stability and governance. "We are committed to directing 84% of this budget towards our school community," she said, noting the shift from an earlier central-office share of roughly 25% in 2020 to a planned 16% next year.
Interim financial officers presented the numbers: the recommended district general fund budget for 2025–26 was shown in the meeting as about $788–789 million in anticipated revenue and planned expenditures that draw on restricted and one-time funds. The team reported a $90 million unrestricted general-fund balance in the recommended budget (below the $100–110 million target staff recommended for long-term stability) and a near-term projected operating deficit of about $47 million in the multi-year projections (row D on staff slides). The budget assumes reductions already implemented and that additional actions will be required in later years to close the remaining structural shortfall.
Finance staff emphasized the district has implemented a supplemental early retirement program (SERP) and other position reductions and expects continued savings from vacancies and restructured staffing models. They also said the district is transitioning financial and HR work to a new platform (Frontline) and that some restricted revenue and carryover amounts may be adjusted before second reading.
Why it matters: The recommended budget determines staffing allocations, program funding and the district’s fiscal trajectory. The superintendent said the plan is meant to keep teachers in classrooms, protect core student services and submit a balanced budget to the state, while acknowledging further reductions may be necessary in future years.
What’s next: The board will receive a formal fiscal stabilization plan and a second reading of the budget at its next meeting; staff will monitor Frontline reconciliations and bring adjustments as needed.
