Education is spared from drastic cuts in the new state budget, but the future seems uncertain.

In June, California approved its $291.5 billion budget for the 2024-2025 fiscal year. The state, facing a $46.8 billion deficit, tapped into its reserves, moved expenses outside of the general fund and reduced $16 billion in funding from areas including an affordable housing program and state operations.

Public education was spared from reductions – lawmakers approved around $8 billion in cuts but they added back from Proposition 98 reserves, to fill a hole in the education budget.

PK Diffenbaugh, superintendent at Monterey Peninsula Unified School District, says he’s grateful education didn’t suffer dramatic budget cuts.

“I think the challenge is they used up most of the education rainy day fund,” Diffenbaugh says, noting if the optimistic revenue projections don’t come to fruition there won’t be a cushion to fall back on.

The community school program will continue but will prioritize districts with implementation grants. It eliminates $500 million for vouchers for hybrid and zero-emission vehicles, which made it more accessible to transition from gas-powered buses to electric. It also suspends school districts from firing certified and classified staff for the upcoming school year. School districts will only receive a mere 1.07 percent cost-of-living adjustment (in the two previous years, they received a 13 and 8 percent COLA adjustment).

Jim Koenig, Alisal Union School District’s superintendent, says the district will be fully funded, but since it will receive a low COLA, “we’re having to adjust how much each of the departments receive in terms of their funding,” Koenig says. He highlights these cuts don’t compare to the ones they faced during the Great Recession of 2008.

These budget cuts further impact school districts that are more dependent on state funds since a chunk of their funding sources come from the state instead of local property taxes.

Student enrollment in many school districts across California face a downward trend. MPUSD loses between 100 to 150 students every year while AUSD lost 200 last school year. (AUSD’s trend is expected to reverse once the housing is built in the West Area and Central Area specific plans).

On one hand, there is the state deficit, and on the other, local student enrollment is decreasing, there is a high cost of living and the Covid-19 relief funds are exhausted. Diffenbaugh says a “perfect storm [is] brewing” and education could face cuts if budget projections don’t materialize next year.

Carmel Unified and Pacific Grove Unified are entirely funded by property taxes. MPUSD and AUSD receive state funding since both have high-need students with about 85 percent and 95 percent, respectively.

MPUSD loses about 100 teachers every year and at AUSD, the district currently has more than 30 vacancies. To help retain teachers and staff, school districts are turning to building affordable housing for their workforce.

Last year, Salinas Union High School District opened its workforce housing. MPUSD has considered a similar approach, and on July 23, the board is scheduled to vote on whether or not to include a bond measure in November to build staff and teacher housing.