Fountain Valley trustees hear budget boost in May Revision but warned to plan for caps, expirations

The Fountain Valley School District on June 11 received a detailed preview of the proposed 2026–27 budget and multi‑year projection, and staff urged trustees to plan carefully despite a stronger state revenue picture. Assistant Superintendent of Business Services and the district’s fiscal team framed the presentation around how the governor’s May Revision could change both ongoing and one‑time dollars available to schools.

District staff said the May Revision shows higher‑than‑expected state collections — described in the presentation as $8.6 billion year‑to‑date in excess of prior expectations as of April — and a large increase in Proposition 98 funding across the three‑year window. “All this additional funding provides us a great opportunity to do amazing things over the next couple of years,” a presentation slide and speaker summary said.

Why it matters: staff warned that the state proposal has trade‑offs. The presentation said the May Revision’s additional Prop 98 deposit would trigger a 10% local reserve cap for districts, limiting the unassigned portion of local reserves. Staff also highlighted that much of the additional money is distributed in forms that are either one‑time or have spending restrictions and expiration dates, which complicates long‑term budgeting.

Key details from the presentation

• Special education: The presentation said the governor proposed a roughly 43% increase in special education funding; district staff described that increase as fiscal relief because it would reduce the amount the general fund must contribute to special education services.

• COLA and LCFF augmentation: Staff summarized the proposed statutory cost‑of‑living adjustment and an augmentation to LCFF (the presentation cited a 2.87% statutory COLA plus a 1.44% augmentation to LCFF in the governor’s proposal), which factor into the district’s revenue assumptions.

• One‑time block grants and timing: Presenters described additional one‑time discretionary block grants (referred to during the presentation as a student performance professional development discretionary block grant) and noted that existing block grants have expirations the district must track (educator effectiveness funding expires June 30, 2026; learning recovery block grant expires June 30, 2028; potential future rounds carry later expirations). Staff stressed the operational need to log expiration dates and spending restrictions.

• Universal meals and kitchen infrastructure: The May Revision included ongoing support for universal school meals and an additional $100 million proposed for kitchen infrastructure (the presentation referenced a fourth round of kitchen infrastructure funding). The district’s director of food services was cited as having used previous rounds to replace ovens and walk‑in freezers.

Trustee questions and next steps

Trustees asked about downside risks tied to market‑driven tax receipts and the sensitivity of the state revenue picture to economic and policy changes (including corporate relocations and ballot measures). District staff said final details remain subject to state legislative action and that the proposed budget still needed to be adopted locally after the state budget is finalized.

District staff said they will bring the proposed budget back to the board for adoption at an upcoming meeting and will update multi‑year projections as state actions and final revenue figures become available.

What the board will do next: staff indicated the budget would be brought to the board for adoption in short order after the state finalizes its budget, and the fiscal team will continue summer work to close books and prepare unaudited actuals for the fall.