ABC Unified adopts 2025–26 budget projecting $17.2 million deficit; reserves at risk by 2027–28

The ABC Unified School District Board of Education approved the district’s 2025–26 budget and Local Control and Accountability Plan (LCAP) at its June 17 meeting, despite a multi‑hour debate earlier in the evening on a staff plan to consolidate schools.

District staff presented the revenue and expenditure assumptions behind the budget and a required three‑year projection. For 2025–26 the district estimated total general‑fund revenues of approximately $314.3 million and total expenditures (including transfers) of approximately $336.6 million, producing a projected deficit‑spend of about $17.2 million. Staff told trustees that about $1.7 million of the shortfall would be reflected in unrestricted funds and roughly $15.4 million would come from restricted funds.

Officials said the three‑year forecast shows continued structural deficits (projected shortfalls of roughly $18.3M in 2026–27 and $18.0M in 2027–28 under current assumptions) that would deplete restricted reserves by the 2027–28 school year if no corrective measures are implemented. District presenters attributed the gap to three principal drivers: declining enrollment (which reduces state revenue tied to average daily attendance), low COLA guidance in state budget projections, and rising operating costs (including healthcare).

Trustees voted to adopt the budget by roll call. Several board members said they supported the motion as a prudent short-term plan to preserve programs and staffing while the board and staff pursue longer-term solutions. “Status quo is not sustainable,” one trustee said during debate; others warned that rushing into closures without full community input would damage trust.

The board also approved an estimated‑actuals report for the 2024–25 fiscal year. Staff told trustees that fiscal-year 2024–25 is estimated to end with a $27.9 million deficit largely driven by a one-time AB 218 settlement and other one-time liabilities; staff estimated an ending fund balance of about $75.6M (roughly $12.8M unrestricted and $62.7M restricted) as of June 30, 2025.

What happens next: The board asked staff to return with additional, site‑level fiscal detail, a grant inventory (including which grants are site‑specific and which are portable), and precise savings calculations for any closure scenarios. Trustees asked staff to include those materials in follow-up briefings and a scheduled study session to examine equity and school‑choice consequences before any final decisions on consolidation are taken.