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Middletown Unified approves 2nd interim budget despite multi‑year structural deficit
Summary
Trustees approved the district's 2024–25 second interim report showing a positive certification but ongoing deficit spending that will deplete reserves within three years unless further reductions or revenue changes occur. The board heard specific line-item adjustments and a new $1.0 million CTE grant that will be recognized in a later revision.
The Middletown Unified School District board on Tuesday approved the district’s 2024–25 second interim financial report, while staff warned the current budget picture still projects multi‑year deficit spending.
Tanya, who presented the report, said the district retains a positive certification for 2024–25 but “we continue to deficit spend even with the reductions that have been made.” She told trustees the district’s unassigned ending balance for the current year is roughly $2.2 million and that the fund balance will be substantially depleted in the following years under current projections.
The presentation identified specific changes that have improved the near‑term position but still leave a structural shortfall over the three‑year projection. Staff described position and program adjustments moved between unrestricted and restricted accounts, including $35,000 in bus‑driver reductions, about $42,000 for reduced IT support hours, an $80,000 elimination of an online‑teaching program, and staff moves totaling roughly $251,000. Tanya also noted adjustments to insurance and indirect costs that reduced forecasted expenditures.
Trustees and the public asked for clarity on cash versus fund balance and on how long current reserves will last. Community member Ken Davis said the district is effectively running a large annual deficit and urged transparency about next‑year cuts. Tanya and board members reiterated the district must continue to implement its deficit‑elimination plan and consider additional measures to avoid exhausting reserves.
Board action: motion to accept the 2nd interim budget report passed 5–0. Staff said the report will be updated if and when new revenue or negotiated labor outcomes alter the assumptions.
