SVUSD adopts 2025–26 budget as staff warn of larger multi‑year shortfalls

The Saddleback Valley Unified School District board on Tuesday adopted the 2025–26 budget after a presentation from Robert Craven, assistant superintendent for business services, that described a narrow shortfall this year and growing structural deficits in later years.

Craven told the board the district used a 2.3% cost‑of‑living adjustment and a three‑year average for average daily attendance (ADA) in assembling the budget, citing a funded ADA of 22,175.09. He said revenues for 2025–26 are projected at $303,000,000 with expenditures of $304,700,000, producing a projected deficit spend of $1,300,000 and a projected ending fund balance of $66,300,000 after reserves and assignments.

"Through the work we've done these last seven months, we're able to present a positive MYP," Craven said, summarizing the multi‑year projection he presented. He warned, however, that the district faces larger shortfalls in out years: a projected $18.6 million deficit in 2026–27 and a $26.7 million deficit in 2027–28 if current assumptions hold.

The presentation said declining enrollment remains the primary driver of revenue loss, offsetting COLA increases. Staff showed that decreases in ADA and lower birth rates continue to reduce long‑term funding, even as some sites with new housing see enrollment growth. Craven said the district has reduced staffing and reallocated funding where possible, and has used one‑time resources — including a $10.2 million reimbursement from former redevelopment agency funds — to shore up the near‑term budget.

Craven also called out recurring pressures: special education contributions exceeding $50 million per year and a required charter school pass‑through payment that reduces the district's ability to reach community‑funded status. He estimated that if the $26 million the district contributes to charter transfers counted toward community funding, the district could become community funded by 2027–28 and gain roughly $6 million annually.

Board members asked for further detail on staffing reductions and the drivers of a projected $21 million increase in expenditures from 2026–27. Craven said textbook adoptions, technology investments and inflationary pressures (including tariffs) account for much of the near‑term increases and offered to provide a deeper breakdown at a later meeting.

After the budget presentation and discussion, the board unanimously approved the 2025–26 Local Control and Accountability Plan and adopted the budget. The vote on the budget carried with all trustees voting in favor.

Next steps include monitoring the state budget through late June and returning with a 45‑day revision to the board in August if substantial changes occur in Sacramento. Craven said staff will continue to evaluate staffing levels, monitor vacancies in light of declining enrollment and pursue long‑term structural adjustments to align personnel costs with changing enrollment.

Action at a glance: the board voted unanimously to adopt the 2025–26 budget; staff will report back with further detail and any necessary revisions after the state adopts its budget.