WATSONVILLE—The Pajaro Valley Unified School District Board of Trustees on Wednesday got a first look at its budget for the coming school year, which has taken a severe hit both by declining enrollment and the loss of revenue from the Covid-19 crisis.
PVUSD Chief Business Officer Joe Dominguez said that the numbers presented were a stark contrast from earlier in the year, when the state boasted a multi-billion surplus and a $222 billion spending plan. It is now facing a $54 billion shortfall.
That is due largely to the novel coronavirus, which forced schools statewide to close and lose out on millions in average daily attendance (ADA) funding. In PVUSD, that number is $3.4 million.
That is in addition to a 10 percent cut to education statewide, which amounts to a $19.18 million reduction for the district, which also faces a $3.6 million loss due to declining enrollment.
To make matters worse, because fewer employees are now planning on retiring and moving on to different professions due to the instability of the job market, PVUSD is looking at an unexpected $1.9 million in salary and benefits costs.
“Post-Covid, those surpluses depleted and are being offset by the losses in revenue,” Dominguez said.
The financial picture could change for the better if Gov. Gavin Newsom and the state legislature reach a compromise and pass a budget aimed at reducing the deficit. Lawmakers and school officials statewide are also holding out hope that U.S. lawmakers will pass a second stimulus bill.
“If they can come to an agreement—the legislature and the governor’s office—and we get some great news, we will share that great news and it will have a positive impact to our budget,” Dominguez said.
But because the district is required by law to submit a budget to the Santa Cruz Office of Education by June 15, it must use the numbers it currently has in front of it, Dominguez said.
Those show that, by the 2022/23 school year, the district will start with a beginning balance of $10.5 million, and end with just $3.8 million. That is compared to a beginning balance this year of $17.3 million and an ending balance of $16.25 million.
The three-year projection would put it below the 3% reserve required by law, placing it in a “qualified” budget, meaning it may not be able to meet three years’ expenses.
Among the cuts currently facing the district are seven academic coordinators, reducing about seven classified positions and 13 intervention teachers.
The proposed reductions would occur through reassignments and freezing of vacant positions.
If the governor’s budget goes through with the 10% cut, however, the district could face layoffs.
“It’s definitely unprecedented times, and we are doing our best to navigate it,” Dominguez said.
PVUSD Superintendent Michelle Rodriguez said that it is likely the impending recession will last for multiple years, with no Cost of Living Adjustment.
The Trustees are slated to pass the final budget at the June 24 meeting.