Budget Resources

There are four main reasons:

• Loss of Unitary Tax Revenue (Diablo Canyon) - Diablo Canyon was scheduled to close. PG&E has been depreciating the nuclear power plant over the past seven years with 2025-26 as the final year of depreciation. The district did receive one time funding to help offset the reduction in unitary tax (SB1090 funding). This was fantastic, but now we are receiving our last payment and need to make the necessary adjustments to our budget. 
  • In 2016-17 the district received $10,616, 362 in unitary tax.
  • In 2024-25, the district received $3,710,859 in unitary tax. 
  • This is a $6,905,493 reduction in revenue and we will see what the unitary values are in November (post-depreciation). 

• COVID-Related One-Time Funding Has Ended - The district received millions of dollars in one-time revenue to assist us with helping students who had learning loss during those COVID years. The district used these funds to hire a lot of personnel to assist our students. Over 173 additional staff were hired during this time period with one-time funding. That funding has been expended, but we have not reduced personnel back to pre-COVID levels. 

• Addition of Transitional Kindergarten (TK) - The district has added an additional grade level. Transitional Kindergarten is open to all 4 year olds now and these classes require low enrollment and additional staffing. Each class has a teacher and an aide. The district does not receive any additional funding for this program that the state has mandated and called “Universal,” even though Basic-Aid districts like ours are provided no funding to essentially add an additional grade level to our public school offerings.

• Rising Staffing Costs - The cost of our employee’s retirement systems has grown dramatically over the past 10 years. The state passed legislation that increased the district’s contributions. Since 2014-15, STRS (teacher retirement system) went from requiring the District to contribute 8.3% of an employee’s salary to their retirement fund, to requiring the District to contribute 19.1%.  PERS (classified retirement system) went from 11.7% to 27.5%. 

The district has also negotiated 29% in salary increases during that same time period, so that our employee compensation can keep pace with inflation of everyday living expenses.

Excellent question and one that we have been asking our legislators and PG&E. 

SB846 extended the plant’s operation until 2030, but unfortunately did not include a provision for unitary tax values to return to pre-depreciation levels or a continuance of SB1090 funding during this continued operation of the plant. The last SB1090 payment to the district is for the 2025-26 fiscal year.

PG&E is expecting to receive notice from the Nuclear Regulatory Commission this fall on whether they will receive a 20 year extension to their license. At that point, it will be up to the state legislature to work on another extension of the plant. Everything we have read points to the need for continued operation of the plant and we are hopeful that this issue will be addressed in that legislation.

The district continues to advocate for a return to pre-depreciation unitary tax levels or a funding source that maintains those levels as long as the plant remains open.

The needs of our students have only seemed to intensify post-COVID, both academically and emotionally. We have developed some great interventions and supports for students in need that are now very difficult to take away. Whenever reductions are proposed, we understandably hear from parents, staff, and others who oppose the reductions.  Many interventions are clearly working and are needed, but we simply just don’t have the funding anymore to support them all.

Both Measure D and now Measure C are solely used for modernizing our school campuses. Legally, those funds can not be used for salaries or anything that was not part of the bond language. Bond funds are making dramatic changes to our facilities and providing our students with state of the art classrooms. We are fortunate that our community has supported our schools. The upgrades to our facilities significantly helps  our budget in that it provides funding that would otherwise need to come out of our general fund budget.

Yes and we have had to dip into these reserves over the past five years.  But this is unsustainable and our reserves are getting too low. The district has to balance the budget, replenish our reserves,  and cure our structural deficit to remain fiscally solvent.

San Luis Coastal Unified is a Basic Aid district, our property taxes are higher than what we would receive in state funding. Because of this fact, we do not receive funding per student. So when California voted to institute Transitional Kindergarten and make it a mandate, the district had to add the classes and staffing without any additional funding. Thus taking funds that would be available to other programs to run and increasing our personnel expenditures. That said, our district values Transitional Kindergarten and actually had instituted preschool classes for our neediest students prior to the TK mandate by the state. But our initial 3 preschool classes have now grown to 16 TK classes. 

The district continues to advocate for Transitional Kindergarten funding. We worked with our local state legislator, Dawn Addis, to present a bill to add Basic Aid districts and small districts to the TK funding that the state provides. Unfortunately, that bill did not make it out of committee. We hope to reintroduce a similar bill next legislative session and continue to work on building a coalition around this cause.

SLCUSD is a “low-funded” Basic Aid district, meaning the amount that our property tax revenues exceed state funding is small and that amount continues to shrink each year. Other districts have received large cost of living adjustments, increases in per student funding and expansive funding for the addition of transitional kindergarten over the past five years. The extra funding we received that is above state funding levels is used to support our students and staff and we have all become accustomed to a higher level of support in San Luis Coastal Unified. As a Basic-Aid funded District, we are still in better shape than purely State-Funded districts, but with that excess amount decreasing each year, we are having to make difficult reductions that will make our district more closely resemble those districts around us.

We do receive some revenue from the federal government each year. Most of that funding comes in the form of Title I revenues that go to our schools with larger numbers of low-income students. Those funds provide extra support at those sites. We also receive some funding for professional development and English Learner support. This federal funding has been a bit of a rollercoaster over the past year and we recently heard that they are providing the funding for the 2025-26 school year. It is unknown if that funding will continue. We are not looking to make further reductions due to this potential elimination of federal funds. If and when those funds do go away, the district will need to make reductions accordingly. But for now, we are not trying to make further cuts other than those needed to balance the budget and cure the structural deficit.

Other federal funding includes Special Education and Free and Reduced Meals. So far, both funding sources are safe from reductions. Both pay a portion of the costs associated with the program. For Special Education, the state also provides some funding but costs associated with special education support continue to take more and more general fund revenues to support. 

Free meals for all continues to be a priority for the governor and state legislature and the state provides the rest of the funding to make that program continue. Food service funding is separate from the district’s general fund. Those revenues, like bond dollars, can only be used for food service expenditures.

The district continues to advocate for the reestablishment of the unitary tax or a continuance of SB1090 funding while Diablo Canyon Power Plant remains open, as well as for funding to support the state-mandated addition of Transitional Kindergarten. Both of these could provide significant funding to help address our structural deficit. Until we secure either, necessary reductions will need to be made.

Another potential revenue source for school districts is parcel taxes. Many districts across the state have implemented parcel taxes to sustain essential programs and services. To pass, parcel taxes require approval from two-thirds (66.7%) of voters and can vary in duration. The specific use of funds must be outlined on the ballot, and exemptions may be applied. For example, a $59 annual parcel tax could generate approximately $2.6 million in revenue, while a $99 parcel tax could raise $4.3 million annually.

Before considering this option, the community would need to be surveyed to gauge support for such a proposal. Given that two current general obligation bonds are already being funded by the community, we are uncertain about the level of support for an additional tax.