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AUHSD budget outlook improves but long-term deficits remain, district told
Summary
District staff told trustees the May revise improves near-term revenue — including a proposed one-time block grant of roughly $21.2 million and $9.3 million ongoing special-education funding — but projected multi-year deficits persist without structural changes and enrollment remains in decline.
Anaheim Union High School District staff presented the proposed 2026–27 budget at the board’s June 4 meeting, leading with state-level context and updated May revise projections that substantially eased earlier deficit forecasts.
Chief business presenter Dr. Nen said state deferrals for 2025–26 were down from earlier estimates, leaving AUHSD with an estimated $15.2 million in receivables tied to prior-year deferrals. The presentation highlighted two major provisional changes in the May revise: a one-time Student Support and Professional Development discretionary block grant projected at about $21.2 million for AUHSD (available through June 30, 2030), and a historic ongoing increase to AB 602 special education funding, estimated at roughly $9.3 million for the district.
Those additions, coupled with a higher LCFF COLA, produced a projected positive unrestricted balance for 2026–27 in staff’s proposed budget. Dr. Nen cautioned, however, that without structural changes the district would begin deficit spending in the 2027–28 fiscal year under current assumptions, with projected deficits increasing in subsequent years. Key ongoing pressures include continuing pension contribution increases and rising healthcare and workers’ compensation costs.
Trustees asked for additional detail on several items. Dr. Nen and staff explained that the district’s average daily attendance (ADA) remained near 92%—below pre-pandemic levels—and that declining enrollment is expected to continue (staff projected a multi-year decline averaging several hundred students per year). The district said short-term remedies to recover ADA include independent study contracts, Saturday academies and calendar alignment with neighboring districts, and staff said they are analyzing site-level attendance patterns.
Board members also pressed on a state proposal to expand paid pregnancy disability leave to up to 14 weeks. Using a three-year averaging methodology, staff said the district estimates that mandate could cost the district roughly $500,000 annually if enacted as written; the estimate was presented as preliminary pending final legislative language.
Dr. Nen outlined budget assumptions (COLA estimates, CalPERS rate projections, workman's comp and health benefit trends) and a fiscal stabilization plan that includes a dedicated reserve to smooth the impact of declining enrollment and future deficits. She said the district would present final adjustments after the state budget is signed and during the 45-day post-enactment window required for local updates.
A public comment speaker later urged greater transparency and earlier public posting of budget documents; staff responded that the full budget materials are included in the board packet and will be available for public review prior to the June 11 adoption vote.
