Faced with projected budget deficits for the next several years, Poway Unified School District trustees met with finance staff Feb. 6 to prepare for potential cutbacks before the next annual budget is approved in June.
Greg Magnuson, interim associate superintendent of Business Services, explained the high points of the district’s revenues and expenses to trustees during the 2025-26 budget workshop held as a public meeting at the district’s office.
Magnuson said it is the first of several steps needed to identify priorities.
“We need to develop a consensus on how to work down the deficit and balance the budget,” he said before highlighting projected shortfalls.
In the unrestricted general fund, which budgets core district programs, staff is projecting a $17.42 million deficit in 2024-25, a $18.56 million deficit in 2025-26, followed by an $18.69 million deficit in 2026-27.
This year’s unrestricted general fund ending balance is $55.29 million, he said. Officials estimate that balance is expected to drop to $36.72 million in 2025-26, then to $18.03 million in 2026-27, and $734,954 in 2027-28.
Superintendent Ben Churchill said district leaders are looking to make $11 million in reductions in just the 2024-25 budget year alone. Trustees estimate further cutbacks of $13 million in the 2025-26 budget and $18 million in reductions the following year.
At the start of the budget workshop, Churchill called on the dozen attendees, who included trustees and department superintendents, to find “bold and creative solutions” toward balancing the budget.
“We need to collaborate and operate outside of our comfort zone as we make our decisions,” he told the group.
At the conclusion of the workshop he added: “We want to look at opportunities for how increasing revenues can be part of an overall strategy, but we can’t rely on those exclusively to get to where we need to go.”
During the workshop, Magnuson identified potential areas for “slowing spending.” These may include reductions in information technology, Learning Services projects, student services and personnel, he said.
Specific ideas he offered for trimming the budget include prioritizing expenses identified in the Local Control ability Plan, which aims to increase or improve services for students who are low-income, foster youth and English learners. Magnuson said the district receives a supplemental annual grant of roughly $15 million for this category, and although there are requirements for spending the funds, the district can “assess spending priorities.”
Another area for consideration is income received from one-time state funding sources such as the Arts, Music and Instructional Materials Block Grant and the A-G Completion Improvement Grant Program, which s high school student eligibility requirements for college issions, Magnuson said. Sometimes grants such as these allow trustees discretion on how the funds can be spent, he added.
Another large source of revenue to be considered when evaluating the budget is special education funding. Last year, state and federal income for special education services and materials increased from $20.5 million to $31.5 million in 2024-25, Magnuson said.
But he cautioned that many variables exist in the budget with student enrollment, student attendance and staff salaries.
In California, school districts receive funding based on the number of students enrolled and the number of students who attend class.
Currently, K-12 schools in California receive $2,748 per pupil from the federal government, $10,338 per pupil from the state and $6,529 per pupil from local sources per year, according to Education Data Initiative statistics gathered from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis.
But Magnuson said Poway Unified’s student enrollment is decreasing. Enrollment declined from 35,164 in 2021-22 to a current enrollment of 34,411 students, he said. A significant indicator of future enrollment is the kindergarten enrollment numbers, which he said totaled 2,235 students in 2021-22 but are now at 1,962 students.
Trustee Michelle O’Connor-Ratcliffe said she would like more information on how Poway Unified can attract more students through interdistrict transfers, which allow students to attend a school in another school district outside of their district of residency.
Additionally, Magnuson said the budget is based on having an average daily attendance of 95.5%, which is the percentage of students attending school every day.
One of the potential budget impacts could also be a reduction in the cost of living adjustment (COLA) from 2.93% to an estimated 2.43% in 2025-26 based on the governor’s preliminary budget projections, Magnuson said previously. COLA is an increase in funding for schools from the state due to inflation and affects how much funding the state provides to the school district based on its student attendance numbers.
Magnuson, who will soon be replaced by permanent associate superintendent of Business Services Eric Dill, said one additional area to pay attention to in the budget is staff salaries and benefits. This category makes us 67.7% of the unrestricted general fund and $32.3% of the restricted general fund, he said.
Early in the workshop discussion Trustee Tim Dougherty said he s “lean manufacturing” principles to eliminate inefficiencies and strive for continuous improvements. He suggested his colleagues “examine everything, not just spending.”
School board President Ginger Couvrette agreed, saying she wants to consider options before making drastic budget cuts. She suggested officials review changes to programs that don’t affect employees first.
O’Connor-Ratcliff raised concerns about retaining staff.
“Our employees have not had raises for a while,” she said. “How will they understand when other districts are giving them? That’s unacceptable if we lose staff. We need to keep and reward the best staff and not lose anyone. When we talk about budget cuts it’s hard to give raises. We can’t expect to keep staff if we don’t offer raises, and sooner is better than later.”
Trustee Heather Plotzke said legal fees may increase if cuts are made to staffing and services become inadequate.
Trustee David Cheng agreed with offering raises once deficits are reduced. During the discussion, Cheng also asked staff to present scenarios in which the district is no longer operating with deficits three years from now.
“I’m in favor of initial deep cuts to get in the black sooner, then continue to grow that way,” Cheng said. “I’d like to look at specific things to consider cutting. I’d like to look at the cost effectiveness of programs and which programs are producing results.”
