Preliminary 2026–27 budget: staff warn of multi‑year pressure despite one‑time relief

District finance staff presented the preliminary 2026–27 general fund budget and warned trustees that multi‑year structural pressure will require ongoing reductions beyond one‑time relief.

Business staff projected enrollment growth of about 1–1.5% (estimated ADA ~94.2%) and noted statutory COLA estimates, but emphasized that personnel costs and rising retirement/benefit rates (STRS roughly 19.1% for certificated, PERS roughly 26–27% for classified payroll) are primary expenditure drivers. The preliminary budget shows roughly $130 million in general-fund revenues and $136 million in expenditures, producing a projected $6.7 million reduction in ending fund balance for the 2026–27 year. The district’s unrestricted reserve is forecast to decline by about $4.7M; staff said roughly $3–4M of that decline reflects planned supplemental carryover and one‑time uses and that $2M of one‑time block‑grant funds are being used to mitigate next‑year pressure.

Finance staff cautioned that May‑revise proposals at the state level (a proposed "super‑COLA" of 1.44 percentage points, possible special-education funding increases, and a proposed student-support block grant) could materially change the district’s outlook, but those items remain uncertain and timing is unpredictable. The superintendent and trustees discussed that paid-pregnancy disability proposals and other new legally mandated leaves could increase district costs in unanticipated ways.

Trustees asked for multi‑year budget modeling and for the budget committee to recommend the ongoing reductions needed to right‑size the district’s structural gap. Staff will present a final adopted budget at the June 16 meeting and revised projections after the state budget is adopted.

Next steps: board will consider adoption of the budget at the June 16 meeting; staff and the budget committee will pursue specific ongoing reductions to close the projected structural deficit.