Visalia Unified approves first interim budget report, warns of $12.5M structural gap

The Visalia Unified School District board unanimously approved the district’s 2025–26 first interim budget report after Chief Business Officer Nathan Hernandez presented revenue and expenditure trends and multiyear projections.

Hernandez told the board the district’s adopted budget originally showed a roughly $10 million shortfall that increased by the first interim to a larger deficit after accounting for enrollment declines and one‑time spending. He said part of the increase reflects using prior one‑time funds received during the pandemic (ESSER/CALSHAPE) to pay current-year costs, and cited textbook adoptions ($6.5 million) and other one‑time expenditures as principal drivers. On the unrestricted general fund, Hernandez said the adjusted structural deficit for the current year is about $12.5 million and that the district would use reserves to balance the year; without adjustments the model showed a potential approximately $23 million shortfall in future years. He noted a 9% increase in health insurance costs and a decline in LCFF revenues tied to enrollment trends.

During public comment Patrick Hemphill, president of the Visalia Unified Teachers Association, urged the board to fully review the impacts of cutting positions funded with one‑time monies and to understand the classroom effects of candidate reductions. Several board members emphasized that people are the district’s principal asset and asked staff to prioritize preserving key student supports as budget decisions proceed.

After questions and discussion, the board approved the first interim report and directed staff to return in January with proposals for balancing the multiyear projection and next steps for the 2026–27 budget cycle.