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San Marcos Unified projects deficit spending despite $311.7M revenue; board adopts positive certification
Summary
The district presented a first interim report showing projected revenues of $311.7 million and expenditures of $338.8 million for 2025–26, citing rising benefits and utilities; the board voted to adopt the first interim and a positive certification.
Assistant Superintendent Erin Garcia presented the district’s 2025–26 first interim financial report on Dec. 11, telling trustees the district expects $311,700,000 in general fund revenues and $338,800,000 in expenditures, which would produce deficit spending without corrective action.
Garcia said the district has identified $4.2 million in additional revenue since the August update (increases in LCFF from additional TK students, federal carryover, local contract routing and grants), but that expenditures rose by $7.7 million. Major drivers include an 11% increase in Kaiser health premiums that required a $2.6 million budget increase mid‑year and higher services/operating costs (utilities, insurance). Restricted program carryovers and one‑time grants also contribute to the profile.
Multiyear projections show a structural deficit of roughly $9–10 million across three years unless the district reduces expenditures or receives larger state COLA support. Garcia recommended the board adopt the first interim report with a positive certification; trustees voted to adopt the report and positive certification by voice vote.
Board members discussed enrollment declines (350 fewer students vs prior year; 874 fewer in last two years), the effect of declining kindergarten cohorts on future funding, and upcoming staffing and layoff planning tied to expiring one‑time grants.
