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PVUSD warns of mounting budget gap as enrollment falls; officials propose cuts and new outreach
Summary
District officials presented a proposed 2025–26 budget showing a structural deficit (about $10.5M in 25–26) driven by declining enrollment and rising costs; staff warned of further reductions needed to preserve reserves and avoid cash‑flow strain.
The Pajaro Valley Unified School District presented a draft 2025–26 budget on June 11 that projects a structural deficit in the coming year and in out‑years, prompting district leaders to renew calls for cost reductions and community engagement.
CBO Jenny M. told the board the district now forecasts a roughly $10.5 million shortfall in unrestricted spending for 2025–26 and warned the gap will widen in subsequent years unless revenue or program reductions occur. She attributed the strain to lower state revenue in the governor’s May revision, declining enrollment that reduces LCFF funding and rising employee costs (pensions and health benefits).
Why it matters: LCFF––the district’s primary unrestricted revenue source––fell in dollar terms even as the state announced small cost‑of‑living adjustments, because Pajaro’s student counts and ADA are down. That combination has left the district facing ongoing deficit spending, the district said. The CBO urged the board to consider larger reserves and to continue a community‑inclusive sustainable budget team that the board launched earlier this year.
District staff emphasized three areas of risk: (1) potential federal funding cuts (the presentation cited possible elimination of Title III and migrant education funding in a proposed federal budget scenario), (2) lingering one‑time pandemic funds that have expired, and (3) growing costs for pensions and health care. Jenny M. spelled out that special education revenues are projected to decline, shifting a greater local share onto the general fund.
Board members talked through options. Trustee comments ranged from proposals to press county and federal representatives for reimbursements (including FEMA) to requests for better two‑way community communications about the budget. Several trustees urged planning now to avoid abrupt layoffs, and staff said further reductions will be developed with community input and the sustainable budget team.
What’s next: The board held a required public hearing and will adopt a final budget June 25; staff said state and federal actions could force a revision in late summer when the state finalizes its budget.
