Mill Valley School District projects $3 million deficit; trustees urged to weigh parcel tax and spending choices

The Mill Valley School District on March 5 told its board that it expects to end this year with a roughly $3.0 million deficit and will need near‑term decisions about revenues and spending.

Finance staff presented the district's second interim report for 2024–25 (July–January), saying locally generated property taxes and the parcel tax remain essential to the district's operations. The presentation showed the district meeting state minimum reserve rules but falling short of a board policy target range of 25%–35% for local reserves.

Why it matters: The board must balance program supports against a structural budget shortfall. The district projects that, absent changes, reserves could fall toward the low‑teens in out years and that some one‑time state funding would not permanently solve recurring expenditure pressures.

District staff told trustees that the second interim incorporates recent changes, including a modest (4.1%) estimate for property‑tax growth and a move to reinstate transitional kindergarten (TK) that adds classroom and staffing costs. Staff noted an assortment of one‑time funds used this year — including early‑education support — that will drop out of future budgets.

"We do really think that we are gonna have a $3,000,000 deficit this year," a district finance presenter said while explaining adjustments made since the first interim.

Outside review and guidance: Matt Phillips of School Services of California, who reviewed the district's assumptions, said the changes between first and second interim were small and urged trustees to focus on expenditure choices rather than counting on future state revenues. "I would not count on new revenues to get you out of the deficit that you're in," Phillips said, noting that proposed state block grants and a modest COLA are uncertain and that Mill Valley's low unduplicated pupil percentage would likely reduce per‑pupil allocations under weighting proposals.

Trustees pressed staff and the consultant for more detail on what it will take to return to the board's reserve target. District figures cited during the meeting showed current reserves near 20% and projected declines in 2026–27 and beyond unless the board adopts offsets such as the planned supplemental parcel tax renewal.

Key numbers and options discussed: - Projected deficit this fiscal year: $3,000,000 (district projection). - Parcel tax renewal estimate (if passed): $2,000,000 in revenue recovery (district projection). - Approximate interim campus cost for one facilities element: $20,000,000 (discussed later in the meeting).

Next steps: Staff urged community engagement and scheduled a public study session to solicit input on priorities and the multi‑year projection. The board did not take a final spending vote on this item during the March 5 meeting; trustees were asked to review materials and return with questions at the scheduled study session.

Sources: Presentation and Q&A with district finance staff and Matt Phillips of School Services of California.