VUSD gets first look at 2024-25 budget

(Rigo Moran)

Visalia Unified School District reveals upcoming budget for fiscal year 2024-25 amid state deficit

VISALIA – For the second year in a row, the state of California will go into the next fiscal year with a significant deficit, but staff at Visalia Unified School District plan to go into the year with a balanced budget and look to avoid making any serious cuts.

The budget for fiscal year (FY) 2024-25 includes the use of one time funds, including Elementary and Secondary School Emergency Relief (ESSER) and Learning Recovery funds obtained during and after the COVID-19 pandemic, to offset a budget gap and leave the general fund with a balance of $112.5 million by the end of the year. The one-time funds are part of VUSD’s five year plan, which was implemented to insulate schools from the state deficit.

“We made an early decision to strategically utilize one-time funds,” stated Jacquie Gaebe, VUSD board president, via press release. “It’s gratifying to see those efforts positively affecting both students and staff.”

The budget includes investments in after-school programs and a cost of living increase of 1.07% to the Local Control Funding Formula. It retains funding for resources to support student learning that is established to address learning loss caused by the COVID-19 pandemic. VUSD was able to hire additional staff and introduced programs to help students catch up.

Enrollment across the district remains flat while average daily attendance numbers have increased slightly but continue to remain below pre-pandemic levels. This will be the final year of a safety net program that protects school district funding by the state regardless of attendance numbers. Nathan Hernandez, VUSDs chief financial officer said there is an expectation of a decrease in funding for the 2025-26 fiscal year once the “hold harmless” program expires after the upcoming budget cycle.

The district’s general fund revenue will hit $477.9 million for the 2024-25 budget, which includes $375.5 million in Local Control Funding Formula funds. These revenues come from state taxes, property taxes and local taxes.

Spending will continue to outpace revenue in the 2024-2025 cycle. The district estimates it will spend $497.9 million from the General Fund with $428.1 million of that coming from salaries and benefits. In all, total expenditures will be $611 million. Unrestricted costs from the general fund total $328 million. Restricted costs make up the remaining $171 million. This will result in a $20 million deficit that will be filled with Learning Recovery Funds that are currently held in the General Fund Ending Balance.

VUSD is required to hold 15% of the total costs in reserve. Hernandez said the reserve fund currently stands at $44 million, which is above the minimum cap for the reserves by $29 million.

The budgeting process is in its early stages and could change depending on the outcome of the state budget, which is anticipated to be passed by June 15 and signed by Gov. Gavin Newsom by June 30. VUSD will then hold a second hearing on the district budget once numbers are firmed up. That meeting is expected on June 18 when the school board will also vote to adopt the budget.

In mid-August, the budget will be reexamined and modified if necessary. The final step of the process won’t happen until fall when the board will begin the planning process for the 2025-26 budget. Tuesday’s hearing was informational and no vote was made on the budget.

“I’m incredibly proud of our board’s fiscal oversight that has positioned us well to face the uncertain economic times in our state,” Superintendent Kirk Shrum said in a press release. However, Shrum was not in attendance for the meeting.

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