School districts face budget deficits
Districts around North County see rising deficits, although the state budget is not expected to cut funding for the next fiscal year
![Several school districts across North County are experiencing large budget deficits. The state, though, is not expected to cut education funding for Fiscal Year 2024-25. File photo Several school districts across North County are experiencing large budget deficits. The state, though, is not expected to cut education funding for Fiscal Year 2024-25. File photo](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2da347d1-f9ac-4f09-9312-3db23e768952_1700x1201.jpeg)
NORTH COUNTY — School districts are staring down the barrel of massive budget deficits as districts finalize next year’s budgets.
One reason for declining funding is a drop in enrollment, property tax challenges and other factors. The Carlsbad Unified School District faces a $7.8 million deficit for the 2024-25 school year as the Board of Trustees discussed during its June 12 meeting. Other districts have much steeper deficits.
The Escondido Union School District reported a $53 million shortfall next year and $26 million in 2025-25, according to inewsource. Oceanside Unified reported deficits of $24.5 million and $25 million for the next two years, respectively.
San Marcos Unified’s two-year budget deficit is $58 million, while Vista is at $43.5 million and Poway at $73 million.
However, the state appears committed to not slash education funding for the next fiscal year.
“The legislature and the governor basically committed to sustain to that level of funding through Rainy Day funds at the state and with some other maneuvers,” CUSD Assistant Superintendent Eric Dill said. “While we’re looking at a very meager increase of 1% on our major source of funding, it’s not a cut and that’s a good thing.”
Perhaps the biggest obstacle for education funding is the massive state deficit. The California Legislative Analysts Office reported several months ago a $73 billion deficit, although Gov. Gavin Newsom’s budget states his office as closed deficits of $27.6 billion for Fiscal Year 2024-25 and $28.4 billion for FY 25-26.
While some have questioned Newsom’s deficit projections, his May revised budget called for slashing education funding by nearly $9 billion. The California Teachers Association and others pushed back saying it was unconstitutional under Proposition 98, which legislates the funding from kindergarten through community college.
According to the Associated Press, California gave public schools $76 billion in FY 22-23 because that’s what they thought the Prop. 98 formula required. Tax collections ended up being 25% less than what the state estimated.
The Newsom administration said it retroactively impacted the formula for public school funding, the AP reported. The administration said the state was only required to give schools roughly $67 billion that year — an $8.8 billion difference.
Newsom, though, wants to let the schools keep the money but he wants the state to pretend the schools gave it back, the AP reported.
The state would not immediately count that $8.8 billion in spending. Instead, they would spread this cost out over future budgets, starting in 2025-26. It’s the equivalent of the state giving itself a zero-interest loan, per the AP.
Although the legislature approved the state budget, it’s a tentative agreement, CUSD Assistant Superintendent Eric Dill said. That means school districts still don’t have a concrete state budget to work off as last-minute negotiations are still being had by the legislature.
Regardless, Dill, who is also the president of the California School Business Association Officials, said education funding will slightly increase this year. Part of Dill’s responsibilities with CASBO is to lobby Sacramento
“What they passed today (Thursday) is still probably a placeholder budget because the governor still has some other ideas on the budget,” he explained. “There will be another bill that comes out … so he can sign the budget. This year, there’s not a lot of motion up in Sacramento. The funding is so meager … and all they’re going to do is give us 1% more than last year.”
Local districts
Carlsbad Unified, meanwhile, will transition to a Basic Aid designation next year, Dill said. He said the main drivers are the number of students (average daily attendance) multiplied by state dollars, which equals the funding entitlement.
The total amount of money is the funding “bucket” from the state. Local property taxes are also added in and if a district doesn’t reach its goal, the state contributes aid. Dill said any spillover from property tax is kept by the district as the state is only funding a minimal amount.
San Dieguito Union High School District will transition to Basic Aid next year, while all the elementary districts south of Carlsbad are already classified as such. The Oceanside, Vista, San Marcos and Escondido districts are not, Dill said.
Also, with higher property taxes, which are classified as unrestricted funds, he said the CUSD will not experience a drop in funding.
“This is what’s called the Local Control Funding Formula,” Dill explained. “It represents more than 80% of our revenue. We’re looking at our budget a little differently. San Marcos, Vista and Oceanside are going to be in different positions. San Dieguito are in the same situation we’re in as they will get more in property taxes than they would from the state.”
In Carlsbad, the district’s General Fund’s total revenue for FY 24-25 is estimated to be $154,598,396 with total expenditures projected to be $162,457,442. The result is a $7.8 million deficit.
![This graph shows the Carlsbad Unified School District’s Fiscal Year 2024-25 projected budget with a deficit of $7.8 million. Courtesy image This graph shows the Carlsbad Unified School District’s Fiscal Year 2024-25 projected budget with a deficit of $7.8 million. Courtesy image](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7d3360fa-4ade-4474-8b8d-3624b9615ba0_919x293.png)
Of the $7.8 million, $3.3 million is from the unrestricted and $4.5 million from restricted funds. Dill said deficits with restricted funds aren’t too much of a worry as the money is typically for one-time uses or from grants.
“Let’s say that came in last year, but you got three years to spend it,” he said of restricted funds. “So last year it looks like you got more money than you spent, and then the next two years you’re spending more than you got. You’re taking that money and spending it until it expires.”
Funding, meanwhile, is based on average daily attendance through the district’s enrollment. Enrollment is estimated to be 10,664 students for the 2024-25 school year with a projected decline of three students in 25-26 and a flat rate in 26-27.
Attendance is also estimated to slightly decline in 2025-26. According to the district, the three-year average for daily attendance was 10,365 and CUSD projects a 10,301 rate in 25-26 and 26-27.
However, some residents questioned two raises for teachers over the past 11 months. The Carlsbad Unified Teachers Association received a 5% raise last year after agreeing to a new three-year contract.
The union also received another 3% raise in April, which was retroactive to January and another 1% raise goes into effect on July 1. CUSD and CUTA typically sign three-year contracts, with the last contract expiring June 30, 2022. The April action has an estimated cost of $8.4 million, according to Scott Davison, who runs the Carlsbad Education Alliance.
According to an email from CUTA to its members, the union and district negotiate over salary, benefits and “two other articles” of the contract, although the union was able to “sunshine the opening” of several others, the email reads. The new contract — and two raises — make Carlsbad the highest-paid district in North County for the first time.
The average salary for teachers (certificated) is $97,012.
CUTA President Rachel Merion-Ott did not return a message for comment about the district’s budget, raises or concerns over potential larger classroom sizes.
As for layoffs, Dill said the district avoided those but will not fill 37 full-time equivalent positions due to attrition. He said most of those positions were hired on one-year contracts.
According to inewsource, Poway did not issue any layoffs but may eliminate vacant positions. Escondido eliminated 27 full-time equivalent positions (21 classified and six certificated) but did not issue layoffs, while Oceanside and Vista did not eliminate or layoff any staff. San Marcos laid off four employees and eliminated eight classified positions.