With a cost-of-living adjustment of 1.07% for the 2024-25 school year — a significant drop from the originally anticipated 3.94% COLA — Glendale Unified School District’s budget has taken a hit, prompting deficit spending and the creation of a financial stabilization plan in the amount of $3.07 million.
The district’s budget, which was approved by the Board of Education on June 25, shows projected deficit spending of $23.1 million in 2023-24 and $11.9 million in 2024-25. The projected ending fund balance for the 2024-25 year is $16.34 million, compared with the year’s starting balance of $30.12 million.
Interim Chief Business Officer Deborah Deal said school districts in the state are entering an era “beyond what I call the golden years of the COLAs gone past,” noting a downward trend compared with previous years. Most recently, the COLA for 2023-24 was 8.22%.
“We had banked on our multi-year projections for a whole year thinking that next year, in ’24-25, we were going to get 3.94% COLA,” Deal said at a June 11 school board meeting. “We built our projections on that number. That is a huge difference.”
Deal described the state’s budget shortfall’s impact on this year’s COLA.
“The state right now is still trying to solve what they call an $8.8 billion but what is actually a $26 billion shortfall from taxes,” Deal said at a board meeting, emphasizing that this shortfall estimate is continually in flux. “… They gave us too much money is 2022 and so they are trying to settle this up with a minimum guarantee.”
The 1.07% COLA affects the district’s ability to address health and welfare cost increases, its step and column salary structure, special education cost increases and inflation of goods and services.
The district is still able to meet its 3% reserve requirement, but Deal notes that GUSD is “right on the line” with a 3.87% reserve. For the year 2023-24, the district’s reserve was 6.30%.
“It is going to be a fiscal year that we have to watch carefully because we are right at our 3% reserve and we haven’t yet completed [wage] negotiations even for last year,” Deal said. “So, there is pressure on the budget, obviously, because maintaining our 3% reserve and our fiscal stabilization plan is a requirement.”
The current financial stabilization plan consists of staffing layoffs for the 2025-26 year affecting departments including coaches, yard duty assistants, elementary assistant principals and athletic coordinators, as well as cuts to address the number of seniors who are not enrolled in seven periods of classes.
Although this plan is approved and planned to take effect in the 2025-26 school year, if the district can find alternative ways to bring in more revenue or reduce expenditures, it could be adjusted.
Currently, the budget estimates $372.20 million in total general fund revenues and $387.12 million in expenditures for 2024-25 for both unrestricted and restricted funds.
“We’ll be looking for savings all throughout the year,” Deal told the News-Press. “We are going to do everything that we can to reduce the pressure on the expenditure side of the budget and at the same time … enhance the revenue side.”
The district is already in talks with vendors about delaying or reducing contract increases, Deal said.
One major way to increase the district’s revenue has to do with its unduplicated pupil count, which accounts for the number of students who are English learners, in foster care, homeless or qualify for reduced or free meals.
If the percentage of students who fall into UPC criteria is over 55%, the district could see vast increases in its Local Control Funding Formula calculation as well as qualifications for federal grant funding.
The unduplicated pupil percentage is taken from the average of the three previous school years. Although this past year GUSD did have slightly over 55%, the two previous years brought the overall percentage down to 54.43% for this coming school year’s calculation.
Although differing demographics among communities are a large factor in a district’s UPP, Deal also pointed to parents’ willingness to fill out income verification forms as a contributor.
Previously for children to qualify for free lunches, parents had to fill out income forms, but the School Meals for All law passed in 2021 made all children eligible to receive free meals regardless of their family’s income. Thus, Deal said some parents no longer have the incentive to fill out income forms but stressed that the forms have additional purposes.
“Those forms actually qualify us for not just for supplemental concentration grant funding, but it also qualifies the district for all of its federal funding,” Deal said. “By not filling out the form, then our numbers across the board are lower.”
Because GUSD is so close to that 55% threshold, Deal said the district is actively working on initiatives to encourage parents to fill out the income verification forms, Deal said.
