The San Carlos School District is preparing to flip back to a state funding designation for the upcoming fiscal year, but conservative planning has positioned the district well for the next three years, trustees learned at a board meeting June 4.
The district’s current community funded, or basic aid, status is largely driven by one-time supplemental taxes from the reassessment of properties, Chief Financial Officer Ralph Crame said. Understanding that these funds would be received next school year, Crame and the district are preparing to revert back as it considered the proposed budget for the upcoming school year.
These supplemental funds are the exact cause of “flipping” districts between state funded and community funded. The financial loss is one issue to tackle, but the timing of when other funding is distributed is the largest strain on districts.
While the flip that San Carlos School District is about to experience is often harder to fiscally tread than flipping toward community funded, Crame said the district has conservatively planned for the scenario and remains fiscally prudent.
The district is estimated to garner approximately $56.5 million in revenue in Fiscal Year 2026-27; its expenditures are estimated to total $55.7 million. The district is estimated to end the fiscal year with an ending fund balance of $10.7 million.
Due to the district’s cost-saving measures and the increased revenue projections for the upcoming fiscal year following the governor’s May revised budget, the district is able to set aside funds away for projected deficits on the horizon.
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It is not until Fiscal Year 2028-29 that the district expects to see a significant budget strain, Crame said. This is due to the anticipated expiration of the current voter-approved parcel tax that generates $3 million annually and largely goes toward teacher salaries and benefits.
From the 2026-27 school year to the 2028-29 school year, the district’s reserves are anticipated to deplete by half, and the overall deficit is estimated to be $4.5 million by 2028-29, Crame said.
Anticipating this, the district’s Board of Trustees approved calling for an election to renew the parcel tax in November. The tax would replace the current rate with a tax that would levy $489 per parcel for eight years and could raise approximately $4.4 million annually for the school district.
“If the parcel tax is successful in November, the district is much better situated,” Crame said.
Regardless of the parcel tax’s success, the district will need to consider other cost-saving opportunities to close any remaining deficit gap, trustees agreed.
Trustees are slated to consider and adopt the final budget at the board meeting June 11.
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