Gov. Gavin Newsom’s latest budget update paints a grim picture for Pajaro Valley Unified School District, which could see a decline in the grant funding it receives for arts and music instruction, and to other academic services.
That’s according to PVUSD Chief Business Officer Clint Rucker, who gave a report on the Governor’s May budget revision on Wednesday.
The revision to the January budget proposal typically comes in May, after a series of legislative hearings and an analysis by the California Legislative Analyst’s Office.
According to Rucker, the state is predicting a $31.5 billion budget deficit in the coming fiscal year, a significant increase from the $22.5 billion proposed in January.
This comes in part from a 20% decline in the Standard & Poor’s 500 index, which tracks the health of the stock market.
That decline heavily impacts high-income earners, on which the State relies for nearly half its revenue, Rucker says.
“When they’re making less, the state is making less,” he said.
California is losing residents at all income levels, and PVUSD is facing a projected 15.51% decline in enrollment through 2031-32, significantly larger than the roughly 8% drop statewide.
That ultimately means that the district will see less average daily attendance revenue, and education officials see the trend of declining enrollment as a portent of the need for future reductions and belt-tightening.
Additionally, the state must wait until October for some $42 billion in federal personal income tax and corporate taxes, which normally come in April but were postponed by the federal government.
All of this means a 49% reduction to the Arts, Music, and Instructional Materials Discretionary Block Grant, and 32% to the Learning Recovery Emergency Block Grant.
The short report was not all bad news. Inflation is at 4.9%, down from the peak of 9.1% in summer 2022, but still above the 2% average. Additionally, the Cost of Living Adjustment will increase from 8.13% to 8.22%.
There are no layoffs planned, Rucker says.
The Trustees will likely revisit the budget in June, when the state finalized its own budget and school districts submit theirs.