Thursday, June 11, 2026

Pasadena Unified Budget Shows Improved Outlook, But Long-Term Pressures Remain

Pasadena Unified School District’s proposed 2026-27 budget shows an improved short-term financial outlook after board-approved stabilization actions, but the presentation for tonight’s special school board meeting shows declining enrollment, rising employee benefit costs, Special Education expenses and fire-related uncertainties continue to pressure the district’s long-term finances.

The budget presentation says the district’s unrestricted multi-year projection maintains positive ending fund balances while meeting the state-required 3% reserve for economic uncertainties. Projected reserves for 2026-27 total 10.81%, including Fund 17 committed stabilization reserves.

But the presentation also says its multi-year projection is a planning tool, not a prediction, and is based on current economic and budget assumptions. The projections assume full implementation of Local Control Funding Formula funding, including cost-of-living and enrollment adjustments.

PUSD projects enrollment will decline by about 2.3% annually through the multi-year projection period. The district also projects a 3% decline in its unduplicated pupil count. For 2026-27, the district’s unduplicated pupil percentage on a three-year rolling basis is projected at 68.44%.

Average daily attendance is also projected to decline. Current ADA is projected at 11,975 in 2026-27, down from an estimated 12,329 in 2025-26. Funded ADA is projected at 12,689.94 in 2026-27 and 12,363.18 in 2027-28.

The governor’s May Revision improved funding assumptions compared with the January budget proposal. The presentation says the statutory cost-of-living adjustment is fully funded at 2.87%, with an additional 1.44% increase in Local Control Funding Formula investment. The district says that additional increase does not apply to all programs and is tied to a proposed mandate involving 14 weeks of paid pregnancy disability leave for employees.

PUSD’s estimated LCFF revenue for 2026-27 increased from $191.6 million at Second Interim to $194.4 million under the May Revision, a difference of about $2.8 million.

The district says LCFF base grants are increasing by the statutory COLA, but notes that this represents more funding per student, not necessarily more total funding.

Two proposed one-time funding sources are not included in the 2026-27 budget. The presentation says the new round of Discretionary Block Grant revenue and additional Learning Recovery Emergency Block Grant funding have not been added.

The budget presentation also reflects the financial effects of the Eaton Fire, including separate unrestricted General Fund projections with and without fire-related revenues and expenses.

PUSD says additional insurance recovery revenues are expected but have not yet been incorporated into the multi-year projection. Current fire-related revenues are one-time resources and are expected to be exhausted by 2027-28.

The presentation also says potential attendance relief through J-13A ADA credit associated with Eaton Fire-related enrollment impacts has not been included in the projections.

Fire-related expenditures in the General Fund are expected to increase the district’s required Routine Restricted Maintenance contribution by about $6.9 million in 2025-26 and later years.

The presentation says employee health insurance costs continue to increase, with the district absorbing the full impact of annual premium increases. Health and welfare increases are projected at 9% in 2026-27 and 7% annually in 2027-28 and 2028-29.

The district also cites ongoing growth in Special Education, maintenance and other unfunded mandates as continuing pressures on the General Fund.

Board-approved fiscal stabilization actions and reductions due to layoffs are reflected in the 2026-27 budget plan and multi-year projection, according to the presentation.

The projection does not include future compensation settlements, collective bargaining outcomes, unknown liabilities, legal settlements, possible state or federal funding reductions, future board-approved investments, extraordinary unreimbursed fire recovery costs, or potential financial impacts from pending insurance claims and litigation recovery efforts.

The Los Angeles County Office of Education has requested an updated Fiscal Stabilization Plan to support long-term fiscal sustainability. The presentation says district administration will continue working with LACOE and FCMAT.

The presentation says future reviews will focus on vacancy management, contracted services, districtwide staffing levels and Special Education service delivery and expenditures.