San Diego Schools Scramble to Make Up Massive $176M Deficit for 2025-2026

The San Diego Unified School District (SDUSD) Board of Education held an emergency workshop earlier this week, continuing to try and find ways to make up for a $176 million deficit for the 2025-2026 without having to resort  to more staff cuts.

Earlier this year, the SDUSD was shown to be in a $94 million deficit. This was due to a variety of issues including variety of issues including declining enrollment, less funding, an increase in expenses, the number of student needs going up, and teachers getting massive raises to avoid a strike. As a result, 48 non-teaching staff were laid off and over 550 open positions were eliminated, including teachers, special education support, and English learner support. Over $100 million was also taken out of their reserves to help halt the budget gap in time for the school year, with their emergency funds going from $158 million to $43 million. Even worse, a few months later, the 2025-2026 budget came out with an even worse deficit – $176 million.

Desperate to solve the $176 million problem in time for next year, as well as the $230 million projected deficit looming for 2026-2027, the District held an emergency workshop on Monday. Quelling parents and other residents on Monday, SDUSD School Board President Shana Hazan admitted that prior budgets had not been fully transparent as they didn’t want to make the situation even worse.

“Leaders didn’t share information about potential cuts early in the year because there was a desire to protect our staff and community from discomfort,” told Hazan to the community workshop attendees.

The need for budget solutions

Some practical solutions were discussed, such as going after students who are chronically absent, as absent students cost the district $90 per day in funding. Others also pointed to recruitment in a way to generate revenue, as a way to help reverse the enrollment decline, which had fallen 12% between  the 2018-2019 school year and the 2022-2023 school year. Not practical was more one-time funding sources, with the district being unable to go to the state for more funding and their own reserves down to $40 million.

The biggest takeaway from Monday was that staff sizes were to blame for a huge part of the deficit. The SDUSD said they would not fill most vacant positions again next year to try to avoid layoffs, but they may still happen. Classroom spending also doesn’t “correlate” with class sizes or teacher salaries. Not being discussed on Monday, however, were school closures and a reduction of teacher salaries, the latter of which the District fears would only cause more teachers to leave positions.

“This is the earliest Board Budget Workshop we have hosted in preparation for the upcoming budget season, that typically begins in December for central office departments and January for school sites,” added the District on Monday. “The intent of engaging earlier is to have more collaborative dialogue with both Board and community members around potential solutions and strategies to address the projected shortfall.”

However, as of Wednesday, hopes are not high with the SDUSD.

“They know what they have to do. Either cut jobs or cut salaries to keep it afloat, look into school closures as their number of students has gone way down, and have each school get an audit to find places to cut down,” explained Amy Hill, a former auditor who focused on educational facilities and employees, to the Globe on Wednesday. “This is a huge deficit, and it was entirely of their own doing. They refused to take hard lines on multiple issues, didn’t contract when it was looking like they would, and haven’t looked into other forms of revenue generation that other districts across the country have been doing.

“They are in dire straits, and yet they still don’t want to make the hard decisions now. They’re being very stubborn on this, but to be fair, most school districts are. Look at what just happened in San Francisco where a superintendent resigned for, in part, trying to get school closures passed. San Diego, well, no one wants the buck to stop with them, even though hard decision need to be made now.”

The next budget meeting for the SDUSD is set for December.