Controversy swirls over CUSD budget, trustee compensation policy

Absent board president draws fire for $3.1M reserve shift, fueling controversy, protest, and Brown Act violation claims

The Carlsbad Unified School District Board of Trustees approved next year’s budget on Wednesday after a controversial attempt to move $3.1 million from a reserve account into another account. File photo

CARLSBAD — Controversy was in full gear on Wednesday among the Carlsbad Unified School District Board of Trustees.

The trustees finally approved the district’s Fiscal Year 2025-26 budget of $172.7 million during a special meeting, but Board President Kathy Rallings was absent after attempting to reroute $3.1 million from the reserves to another fund on June 11. Parents and trustees were furious when they discovered Rallings’ actions, which stem from a previous attempt and failed vote 3-2, with Rallings and Trustee Michele Ward in favor, in January to cut the district’s Economic Uncertainties reserve account from 5% to 3%.

In total, the January action would have transferred $6.6 million from the reserve account, while the latest attempt would’ve siphoned $3.1 million, according to the CUSD draft budget. As of January, there was $13.9 million in the reserve account, which is one-time money held for emergencies, economic downturns and other issues to cover district expenses.

The board’s vote on Wednesday, though, kept the money in the Stabilization Arrangements category.

Above is the Carlsbad Unified School District’s budget proposal allocating $3.1 million from a reserve account to “Board LCAP Priorities.” The line item was instigated by Board President Kathy Rallings and voted down by the board on June 18. Courtesy image

Trustees and parents have questioned the funding transfer as they say Rallings never explained how the money would be used. Parent and Executive Director for the Carlsbad Education Alliance Scott Davison said it was likely a ploy by Rallings, who works for the California Teachers Association union, to increase teachers’ salaries.

In addition to Davison, several other parents and residents spoke to the board on Wednesday urging them to push back against Rallings’ behavior toward other trustees, her budget agenda and asked for the rest of the board to work together.

“You guys can obviously figure out how to work together,” Davison told the board. “But there is one person who isn’t here tonight that doesn’t want to with you, or with us or with anybody. She has her own agenda. She has her own way of going about things, and if she doesn’t win, she does it anyway.”