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Gilroy Unified budget update flags Prop 98 uncertainty; staff defends conservative, adjustable assumptions
Summary
Assistant Superintendent Alvaro Mesa told trustees the May revision lowers some estimates and a potential Prop 98 haircut could remove roughly $2 million from the district’s revenue outlook; staff emphasised conservative assumptions, multi‑year projections and that the budget may be revised after the state enacts its final budget.
Assistant Superintendent of Business Services Alvaro Mesa told the board during a public hearing that the district’s 2025–26 preliminary budget assumes a 2.3% cost‑of‑living adjustment, flat revenues into next year and an enrollment decline. Mesa warned that a proposed Prop 98 adjustment in the governor’s May revision could “shave” funding and, as framed in his presentation, might mean roughly $2 million less revenue for Gilroy Unified than earlier estimates.
"What does it mean to GUSD? It means $2 million of revenue that we could recognize that we're not able to recognize," Mesa said, pointing to the state‑level uncertainty and emphasizing that the district’s multi‑year projection uses conservative assumptions to protect reserves. He described projected deficit spending (roughly $10 million in the multi‑year model) after counting one‑time carryovers for learning recovery and instructional materials.
Trustees pressed for clarity on assumptions and monitoring: Trustee Nelson asked how comfortable staff were using 100% of the COLA for planning; Mesa said the district is experienced at conservative budgeting and flagged enrollment, ADA (average daily attendance) declines and pension contributions as key risks. Several trustees emphasized attendance as a near‑term operational focus tied to revenue and student outcomes.
In a connected public hearing on the LCAP, staff outlined five LCAP goals and described $17–18 million of targeted LCFF supplemental/concentration spending. Board members questioned whether the LCAP’s year‑three targets were ambitious enough for English learners and students with disabilities; staff said targets were set in consultation with the county office of education and that some metrics are lagging (annual state tests) while others (local benchmarks, survey results) provide more frequent monitoring.
No formal budget adoption occurred that night; staff said the board would revisit budget assumptions after the state enacts its final budget and would bring any material changes back for adjustment before the fall.
