Board hears 2026–27 budget presentation showing multi‑year deficits and enrollment declines

Ms. Phillips presented the proposed 2026–27 budget at the board’s June 16 special meeting, walking board members through assumptions on enrollment, attendance, revenue and expenditures and explaining why the district projects deficit spending over the next three years. She described an enrollment assumption of roughly a 150‑student decline per year under the budget’s baseline and noted the district’s funded ADA is calculated on a three‑year average; staff are submitting a corrected P2 by July 15 to capture attendance recovery data.

Phillips described combined revenues of about $133 million versus combined expenditures of roughly $147 million under the district’s multi‑year projection and explained the presentation showed transfers from Fund 40 (capital/technology) and Fund 67 (self‑insurance) as mechanisms that make the multi‑year plan meet the 5% unassigned reserve in the third year. She also flagged several state budget uncertainties — a possible Prop 98 withholding/under‑appropriation, the governor’s proposed “superCOLA” and a newly proposed paid pregnancy disability leave — that could change the district’s outlook. “We expect to continue deficit spending over the next 3 years and be a hair over that 5% reserve in that 3rd year,” Phillips told the board.

Board members pressed staff for clarity on the fund‑balance mechanics and the drivers of the projected declines; staff explained that contributions required to make restricted programs whole (about $18M in contributions shown for one year in the restricted schedule) and a decline in beginning balances are the primary contributors to the multi‑year decreases in the ending fund balance. Phillips said the discretionary block grant and some one‑time learning recovery funds remain uncertain and were not included in the budget until amounts are finalized.