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Layoffs in PUSD Loom as Schools Face Declining Enrollments, Loss of Pandemic Funds, State Budget Woes

Proposed Fiscal Stabilization Plan calls for staff cuts and new revenue sources to close projected budget gaps through 2027

Published on Friday, June 14, 2024 | 5:29 am
 

At a Thursday special meeting the Pasadena Unified School District Board of Education discussed a sweeping Fiscal Stabilization Plan to address projected budget shortfalls through the 2026-27 academic year. 

The plan, which was presented for discussion purposes only and was not voted on, proposed a combination of staff reductions and new revenue generation measures to close the gaps and ensure the District’s long-term financial viability.

District Interim Chief Business Officer Kingsley Udo said the District’s financial challenges stem from a confluence of factors, including declining student enrollment, the expiration of one-time COVID-19 pandemic relief funding, and inadequate state revenues.

“With the advent of COVID, the District intentionally ramped up staffing to address the various learning loss issues to mitigate those challenges,” Udo explained. “And with the ending of one-time funds, this is one area the superintendent intends to work with the partners, to look at reducing overstaffing.”

According to Udo, the District’s hourly payroll costs have become unsustainable, totaling over $20 million in 2023 and $15 million in the first half of 2024 alone. 

“Based on our internal discussions, this is not sustainable,” he said. 

To address this, the Fiscal Stabilization Plan calls for a phased reduction in hourly payroll expenses, cutting $5 million in both the 2025-26 and 2026-27 fiscal years. However, Udo cautioned that these figures are preliminary estimates and will be subject to further review and input from key stakeholders.

The proposed staffing cuts drew concern from several Board Members, who worry about the impact on students and employees. 

“I’m very concerned about the reduction in hourly payroll. I think that’s a pretty big chunk of target,” said Board Member Patrick Cahalan. 

Board President Kimberly Kenne shared similar reservations, saying, “There are many positions that I know we don’t want to get rid of. And so I guess I’m kind of expressing a little discomfort… $5 million is a fairly hefty number.”

Board Member Patrice Marshall McKenzie urged the District to focus more on revenue generation than cost cutting. 

“I know that these are suggestions in terms of ways that we can look at reducing our cost, but I think that I’m very interested in being able to generate additional revenue versus cuts,” she said.

To that end, the Fiscal Stabilization Plan incorporates several potential revenue enhancement measures, including a proposed parcel tax, a bond measure, and strategies to better leverage District-owned assets.

“If the community sees it fit to get behind those two measures, it will definitely help the District tremendously,” Udo said of the parcel tax and bond proposals.

The District is also exploring ways to generate an additional $1 million annually in local revenue by maximizing the use of shuttered school facilities and expanding its transitional kindergarten program to attract new students. 

“We closed several schools. We haven’t really maximized those facilities, so we are revisiting all those things,” Udo said. “We are spending the money keeping those schools open, but we are really not generating market rate revenues. If we really maximize those areas, that’s significant revenue.”

To refine the Fiscal Stabilization Plan and build consensus around the necessary budget actions, Superintendent Elizabeth Blanco has indicated she intends to convene a budget advisory committee composed of community members, parents, staff, and other key stakeholders. 

The committee will be tasked with reviewing the preliminary framework, providing input on priorities and potential impacts, and fleshing out the details of the final plan.

The Pasadena Unified School District’s budget challenges mirror those faced by many school systems nationwide as they grapple with the aftershocks of the pandemic, including enrollment losses and the expiration of federal relief funds. 

While the District’s Fiscal Stabilization Plan provides a roadmap for addressing these issues, the specifics will likely evolve based on feedback from the community and the work of the superintendent’s budget advisory committee in the months ahead.

As the District navigates this difficult financial landscape, Board Members stressed the importance of maintaining the quality of educational programs and minimizing the impact on students and staff. 

“It’s a matter of prioritization and seeing if there’s something that can be done,” Udo said of the budget-balancing process. 

The goal, he added, is to “find a way to gradually reduce [costs] by at least $5 million starting from 25-26 because all our expenditures are absolutely necessary.”

The Pasadena Unified School District serves approximately 15,000 students across 23 schools in Pasadena, Altadena, and Sierra Madre. 

The District’s budget for the 2023-24 academic year totals $347 million, with projected deficits of $12 million in 2024-25, $21 million in 2025-26, and $30 million in 2026-27 if no action is taken.

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