The Pasadena Unified School District Board of Education Thursday, June 12, received a sobering presentation on the financial status of the school district ahead of the 2025-26 fiscal year budget adoption expected later this month.

Superintendent Elizabeth Blanco’s latest message to the community this week included familiar references to financial troubles, but included additional warnings of what potential inaction could spell for PUSD.

The projected operating deficit for the next three fiscal years will be $37.9 million, $36.7 million and $36.1 million respectively, according to Blanco.

In addition, the district’s multi-year projection shows a projected negative ending balance of $78 million in the 2027-28 fiscal year.

“This is a very serious fiscal situation,” Blanco wrote. “We want to be clear: without significant changes, without additional reductions even larger than those recently implemented, our financial trajectory is unsustainable.”

Even before the Eaton fire left hundreds of teachers and families displaced and destroyed multiple campuses, the district faced financial troubles. An oft cited combination of declining enrollment, expiration of COVID-19 relief dollars and rising costs, had left the district in a more than $30 million deficit.

In February, the board of education voted to approve cuts to 151 full-time positions. In the face of protests from students and district staff members, PUSD leadership continued to reiterate that the cuts alone would not solve the larger issue and that more would be needed.

By the end of the school year, many of the layoffs had been rescinded through a process governed by state law and collective bargaining.

During Thursday’s meeting, Chief Business Officer Saman Bravo-Karimi walked the board through the factors impacting the budget process as well as the fiscal stabilization plan, required to also be submitted due to the district’s dire financial straits.

This included a chart mapping out the district’s ending balances over the next threes and comparing scenarios that did or did not include fire related insurance revenues and expenditures as well as projected parcel tax revenue.

“This assumes that no action is taken by the district and, of course, as you know, action must be taken to avoid this outcome,” Bravo-Karimi said.

The plan laid out reductions over the next three fiscal years, including an ongoing reduction of 120 full-time employees starting in the 2026-27 fiscal year.

“The vast majority of any school district’s resources are spent on people,” Bravo-Karimi said. “When districts are facing the size of fiscal challenges that we are facing, and many are, it’s very difficult to bring it into balance without impacting staffing levels.”

Other proposals in the plan include central office reductions, reductions in special education contribution, reductions in supplies and contracted services, reduction in transportation costs and energy efficiency savings.

No one spoke during the public comment period.

Trustee Yarma Velázquez made a commitment to cut back her own expenditures, including not traveling for conferences and she urged her colleagues to do the same.

“We need to start modeling by example and really try to show how everybody is willing to contribute to the sacrifices that we’re asking of the community,” Velázquez said.

Board President Jennifer Hall Lee and Trustee Scott Harden said that the current financial picture is an opportunity for local leaders and the community to advocate at the state and federal level for better funding of special education.

“There are forces in the country politically that don’t want all children educated in public education,” Hall Lee said, “That’s the root of it.”

Hall Lee pointed to a presentation from earlier in the meeting that recapped the accomplishments of schools and students during this past school year and said through all the future cuts, keeping that growth and achievement going should be prioritized amid looming reductions.

“There have been many districts who operate successfully for students and continue to make gains for students with the types of resources that we’ll have moving forward … It is possible to serve kids well even with the limited funds that we project to have in the future,” Bravo-Karimi said.

According to Blanco, the final budget is due to be adopted at the June 26 Board of Education meeting.

Thursday’s board meeting was streamed live on YouTube.