Board hears five‑year forecast showing pressure from property tax reform and declining state funding

Fairfield Union Local trustees approved five‑year forecast assumptions after a detailed presentation from finance staff that highlighted revenue pressures from recent property reappraisals and changes in state funding.

Finance staff said the forecast centers on changes to property‑tax collections and the state school funding formula. Line 1.01 (local property‑tax receipts) was shown rising to $7,000,000 in the near term before settling lower in later years, while state foundation payments decline as local capacity increases under the current formula. The presenter said the district could receive roughly $5.1 million less over five years than it would have under the prior framework.

At the start of the presentation staff put the district’s January cash balance at $10,300,000 (compared with $20,000,000 the prior year) noting a year‑end transfer that affected comparatives. The finance presenter said they are holding enrollment at 1,911 students for projection purposes and using a 10% placeholder increase for annual insurance costs in forecasts.

The board discussed implications for capital planning and special‑education expenditures. Trustees asked about near‑term capital items (boiler and roof replacements) and whether expected capital improvements are already budgeted in the capital improvement plan; staff said major capital items sit outside the general fund in the PI and OFCC funds and that a five‑year capital planning process will be conducted in the spring.

The presenter warned of forecasted deficit spending in 2029 and 2030 (figures shown in the packet) if current tax reform and state funding trends continue, and recommended continued monitoring and potential advocacy for base‑cost increases in the state formula. Trustees approved the forecast assumptions by roll call at the end of the presentation.

No formal budget change or levy action was taken at the meeting; the presenter reminded trustees that the permanent improvement levy remains in place and generates roughly $380,000 annually.