Visalia Unified ‘tightens belt’ in face of $12M deficit

(Rigo Moran)

A worsening state budget outlook leads Visalia Unified School District to anticipate multimillion dollar budget deficits over the next few years

VISALIAVisalia Unified School District, and their board, will be forced to take some action on their next few budgets as their deficits climb to over $12 million.

VUSD’s Chief Business Officer Nathan Hernandez told the board at its March 12 meeting that the current budget is a “pulse check.” VUSD currently has a deficit of $12 million in the 2023-24 fiscal year. Hernandez also reported to the board that VUSD is anticipated to run at a deficit for the next two fiscal years, climbing to $13.46 million by 2025-26.

“There aren’t a lot of changes between the first interim and second interim, so some of the numbers won’t be very different,” Hernandez said. “I will share that our multi-year projection has changed based on the state budget.”

The board was informed that the Governor’s Office now believes the budget deficit for the coming year has increased from an estimated $68 billion to $73 billion. Gov. Gavin Newsom pledged in January that cuts to close the budget gap would not come from education, but a worsening fiscal situation may prove to be impossible to overcome without some reductions.

“While we are having to tighten the belt…(we are) prioritizing our people along the way,” Superintendent Kirk Shrum said during the meeting. “We are going to have some eliminations, we are looking at the early retirement incentives, we are doing those sorts of things.”

Shrum claimed that the decisions the board has made since the pandemic have set VUSD up for an easier time addressing the tough fiscal years that are expected to come.

In an attempt to soften the blow of major budget shortfalls, VUSD issued a press release on March 11 to highlight the district’s “fiscal strength.”

According to their statement, VUSD adopted a five year plan during the pandemic to strategically allocate one-time funds to support impacted students. They claim that because of their early investment in student success instructors, elementary counselors, psychologists, social workers, as well as facility upgrades, the district is in a strong position to “provide resources to all students next school year with minimal impact to the budget.”

Gov. Newsom has yet to identify how his budget proposal will close the fiscal gap. The next revision will come in May after the state has a better idea of revenues brought in through taxation. Recent reports that Goleta Union School District in Santa Barbara County would be laying off staff and finding other cost-cutting solutions, Pasadena Unified School District Board of Education announced 200 layoffs and Perris Union High School would cancel its Diversity, Equity, and Inclusion Department to save money indicate a wide-ranging problem with school funding in California.

The Legislative Analyst’s Office is currently projecting deficits through fiscal year 2028 as the state deals with losses in revenues from fewer high-income earners and an overall decline in the population. State spending has grown tremendously in recent years, from less than $200 billion in 2019 to $308 billion in 2023-24. The January proposal by the Governor’s Office totals $291 billion, but that proposal was made when the deficit was anticipated to be just $38 billion.

During the VUSD meeting, board member Megan Casebeer Solano said that discussions with legislators are ongoing and that recommendations to reduce mandates are part of the discussion as a result of Prop 98 reductions. Prop 98 is the legislated fund for education.

“The Governor wants to borrow from the general fund, which will pay back in five years, which in reality means we are not totally funding Prop 98,” Casebeer Solano said at the meeting. “We asked our legislators to discourage him from doing that.”

One aspect that is aiding VUSD is a largely stable enrollment, which is a key way school districts receive state funding. Many districts across the state are seeing reductions in the number of students enrolled, making an already tenuous situation more challenging.

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