Brentwood Union School District Budget Newsletter
STATE FUNDING CHANGE IS PROBLEMATIC AT BUSD
The Local Control Funding Formula (LCFF) changed how districts were funded starting twelve years ago. Now, all districts receive a base funding grant for each student who comes to school. Districts receive 20% additional funding per student for each student with high needs, defined as learning English, in poverty, homeless or in foster care. Districts are provided additional money if more than 55% of children in the district qualify as having high needs. As a result of this formula, BUSD receives less money per student than 90% of the districts in the state. If BUSD received the money that Antioch receives per student, we would have over $31 million more to serve our local students. As costs continue to outpace revenue, cuts will eventually be required at BUSD.
*Most current data is 2023-24 at ed-data.org
**Total funding includes unrestricted and restricted, including federal, other state, and other local funding
***2024-25 BUSD High Needs Percentage 32.96%
ATTENDANCE MATTERS FOR LEARNING AND FUNDING
Until 1999, schools’ count of students was based on attendance, but students with excused absences, mostly due to illness, were added to the count. After Senate Bill 727 was enacted in 1998-99, school districts no longer received funding for students who were absent from school for any reason.
In the years prior to the pandemic, BUSD average daily attendance (ADA) was around 97%, meaning that on any given day 3% of students were not in attendance. Since returning from the pandemic, attendance has been significantly lower. In 2023-24, BUSD ADA was at 95.19%, more than 2% lower. In addition to the negative impact on learning, lower attendancerates means the state subtracts from our funding. Each day a student is absent for any reason, the district is fined approximately $75. California is one of only a handful of states that funds schools this way. A 1% attendance decline results in approximately $1 million less in funding. BUSD lost over $2 million in funding last year due to the post-COVID attendance changes. BUSD is actively working to promote students attending school every day they are not sick. There is clear research about the connection between school attendance and student success.
REQUIRED EXPENDITURES CONSUME LARGE PORTION OF NEW MONEY THAT IS PROVIDED TO DISTRICT
The statutory Cost of Living Adjustment (COLA) provided to districts each year is calculated at the state level. It is not specifically designed to provide schools what they need to keep up with inflation. BUSD’s 2025-26 budget was built on a projected COLA of 2.03%.
Each year, mandated and automatic increases have to be accounted for in the budget. These are costs that the district incurs without choice. These include state retirement plan increases, special education cost increases, disability and Medicare increases, Insurance premium increases, increases in utility prices, transportation cost increases, as well as step and column increases to employee salaries based on negotiated salary schedules. In addition, districts negotiate with multiple employee groups each year for salary, benefits, and other contractual items that often have additional costs.
Mandated cost increases often outpace revenue increases to the district, causing deficit spending or the need for budget reductions.
FIRST INTERIM BUDGET & MULTI-YEAR PROJECTION OUTLOOK
First Interim budget was approved at the December 10, 2025 Board Meeting. This report is significant because it moves beyond estimates and shares actual salary and benefit costs, enrollment numbers, and special education costs to date. The District budget continues to be of great concern due to low funding, concerns with the federal and state budget environment, and increasing expenses. First Interim assumptions include updated multi-year projections, updated salary and benefit costs, Special Education increase of $1.3 million, and the district did not see the student growth we had hoped for. Our enrollment was 10,163, or 64 students lower than projected in the budget requiring an estimated reduction of $774,000 in LCFF revenue for this year. First Interim does not include any 2025-26 negotiated salary increases. BUSD is required to show that we can meet our obligations for the current year and next two years while maintaining a 3% reserve. The BUSD Board previously maintained an additional 1.25% reserve, but temporarily suspended that at the August 2024 Board Meeting to avoid making further budget reductions. First Interim unrestricted ending fund balance reserve is 4.25% in 2025-26, 3.77% in 2026-27 and 3.06% in 2027-28. We are currently estimating the need to cut at least $500,000 a year for the next two years to meet the required minimum reserve. This minimum reserve level that we now operate on means that any additional expenditures will need to be matched with equivalent budget cuts.
NEXT STEPS: Second Interim budget will be presented at the March 11th Board Meeting. The 2026-27 Cost-of-Living (COLA) forecast is projected to be lowered to 2.51% from 3.02% by the Legislative Analyst’s Office. The District would not meet 3% reserve in the third year if this is included in the Governor’s January 2026-27 Budget. Special Education program costs continue to rise at an estimated 6.5% or $2 million annually in out years. One-time funds are for specific, non-recurring purposes and mask structural deficits. The instability of Federal funds for 2026-27 remains. District budget reductions are required to meet 3% required minimum reserve. With a 2026-27 reduction of $500,000 and 2027-28 reduction of $500,000. Fund 17 balance of $739,329 transferred into General Fund in 2026-27 to meet the 3% reserve. There is an estimated reduction of $774,000 in funding due to lower student enrollment. There is a loss in funding of $2 million due to lower Average Daily Attendance (ADA) post-COVID. The district budget and reserve are in critical condition in preparing for Second Interim and 2026-27 budget year development.
GOVERNOR'S 2026-27 PROPOSED STATE BUDGET
Governor Newsom released the 2026-27 State Budget Proposal on January 9, 2026. This is the beginning of the State budget process for the next fiscal year which begins on July 1, 2026. Proposition 98 establishes the minimum funding level for K-14 Education. The Governor's 2026-27 Budget proposes to appropriate significantly less in Proposition 98 than his own Administration calculates. This strategy was deployed in January 2025 for $1.9 billion and this year proposes a much larger settle up of $5.6 billion whereby the state refrains from fully appropriating the entire estimated minimum guarantee. This reduction in on-going LCFF revenue has an impact on school district budgets. Included in the 2026 Budget is an estimated statutory cost-of-living adjustment (COLA) of 2.41% This is a decrease of 0.61% from what the Governor projected in the 2025-26 Enacted Budget in June 2025. The Governor’s proposal includes the use of one-time Proposition 98 funds for a discretionary block grant. Allowable uses are consistent with the 2025 Discretionary Grant received in the current year. More information is needed regarding the allocation methodology. If the block grant is distributed using the same approach as the current year, on a per-ADA basis, then the estimated amount is $500 per ADA. The Budget also provides additional repayment to the Learning Recovery Emergency Block Grant from when it was reduced in 2022. The Budget includes an increase in COLA to Special Education and Nutrition Services, and again fully funding the Universal Meal Program which provides free breakfast and lunch to all students. There is also a proposed increase in Special Education to accomplish equalization for Base Rates and proposed increase to the Expanded Learning Opportunity Program for Rate 2.
The State continues to be confronted with structural operating deficits. It projects a deficit of roughly $22 billion in the 2027-28 fiscal year and shortfalls in the two following years. In May, the Governor releases the May Revision which includes updated state revenues, expenditures, and reserve estimates based on the latest economic forecast. By June 30, the Governor signs the Budget Bill into law.