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Jefferson Elementary board hears FY 2026–27 budget warning: ongoing structural deficit and reserve use planned
Summary
Assistant Superintendent Josie Peterson presented the proposed FY 2026–27 budget and multi‑year projection, noting an ongoing structural deficit that will be covered with reserve transfers and one‑time funds while the district pursues longer‑term balance measures.
The Jefferson Elementary School District board heard a detailed presentation of the proposed fiscal year 2026–27 budget and multi‑year financial projection, during which Assistant Superintendent of Business Services Josie Peterson outlined the district’s revenue assumptions and structural challenges.
Peterson said the district is basing estimates on the governor’s May revision, which must still be reconciled by the Legislature. She told the board the state proposal includes repayment for prior “settleups” but that the governor “continues to underfund education by 3.9 billion for the 25–26 school year,” adding the district will incorporate the final state figures in its December interim report.
Peterson summarized key planning assumptions: application of a three‑year ADA (average daily attendance) smoothing method to soften immediate revenue drops from enrollment decline; employer pension contributions (STRS approximately 19.1% for teachers; PERS approximately 26.4% for other employees); and a cost‑of‑living adjustment that includes a 1.44% requirement tied to SB65 pregnancy leave.
On revenues and expenditures, Peterson said roughly 74% of projected 2026–27 revenue is LCFF/ADA driven, federal funds are a small portion, and local revenue is led by a $1.6 million parcel tax. On the expenditure side, she said about 76% of the budget covers employee costs.
The district is projecting an unrestricted operating deficit approaching $6 million and rising in later years of the multi‑year projection. Peterson told the board the district will use reserve transfers to meet the state’s 3% reserve requirement and described planned transfers (about $1.75 million from Fund 17 and an additional $1.1 million from the retiree benefit fund) to cover shortfalls in the near term.
She also noted one‑time state funding opportunities—learning recovery and student support grants—that could total up to $5 million for the district, and flagged that bond funds in Fund 20 will soon be exhausted for major renovations, while the state provides no deferred‑maintenance funding in Fund 14.
Next steps: the board was told a formal budget adoption is planned for the June 24 meeting, with interim updates in August and year‑end actuals in September.
At a later question, a trustee asked for confirmation of the minimum reserve; Peterson said the district’s policy target is 3% of expenditures (about just under $3 million).
