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The Redwood City School District has started the new academic year working to stay ahead of projected deficits over the coming budget cycles.
The work, which includes tapping carry-over funds from previous budgets to remain fiscally solvent, is expected to continue throughout the 2025-26 school calendar.
“We’ll just have to reorient ourselves and be ready for” a financially challenging environment, district board President Mike Wells said during a regular public meeting June 25. But the district still has to ensure that it is “focused on students and … doing the best decision that we possibly can.”
The board at that meeting unanimously adopted a 2025-26 budget that showed a $2.8 million deficit with a projected $148.7 million in general fund revenues against $151.5 million in expenditures.
“To address the shortfall, the district will use a portion of its available ending fund balance – resources carried over from prior years where revenues exceeded expenditures,” district spokesperson Jorge Quintana said in an email to the Pulse. “These one-time funds will help bridge the gap between current-year revenues and expenses as the district works toward identifying longer-term fiscal solutions.”
The ending fund balance was projected to total $9.1 million, according to the district.
RCSD still faces potential structural deficits beyond this school year and is developing “fiscal-stabilization measures,” district Chief Business Official Rick Edson told the board during its meeting.
According to the district’s budget projections, 2026-27 is also looking at a deficit of $1.4 million.
Tackling the deficits “will require ongoing attention and careful management,” Quintana told the Pulse. “As enrollment continues to decline, the district will need to reduce services to align expenditures with the reality of serving a projected lower number of students.”
According to district data, last school year’s enrollment of more than 6,400 students was forecasted to continually fall to about 5,300 in 2033-34.
Other factors are contributing to the funding gaps besides the declining enrollment, including “ongoing increases in the costs to operate schools and a commitment to offering competitive salaries and benefits,” Quintana said.
The district also seeks to continue investments “that respond to evolving student needs,” such as funding academic enrichment activities and contracting for services supporting student programs, he said.
But despite the budget pressures, he said, “the district remains in solid financial standing overall, provided it continues to take the necessary steps to control costs and maintain fiscal responsibility.”
Quintana noted that many other districts statewide are experiencing similar fiscal challenges.
“With fewer students, districts receive less funding from the state,” he said, “but many expenses remain fixed or grow over time. As a result, a growing number of districts are running ongoing budget shortfalls, in some cases exceeding $100 million, and are being forced to reduce programs and services, reduce staff, and use reserves to balance budgets.”
Although the uncertain budget landscape is not unique to RCSD, Wells said during the June meeting, “it is something that hits this district particularly hard.”
The district has already made cost-saving measures, such as reducing teacher and staff positions, largely due to the expiration of one-time state and federal funding tied to pandemic relief. The district has also increased the number of classrooms that combine two grade levels.
Back in December, district Superintendent John Baker released a report identifying $6.6 million in needed savings.
To potentially help meet its financial needs long term, the district is studying whether to place a parcel-tax measure possibly on the June 2026 ballot.
At the same time, a parents’ group is exploring a community-initiated ballot measure as an alternative strategy to bring in new revenue for the district.
In other news, the board earlier in June approved RCSD’s Facilities Master Plan, which identifies more than $819 million in needed repairs, upgrades and construction of learning spaces and infrastructure districtwide over the next eight to 10 years.
The $298 million bond Measure S, which voters approved in 2022, helps move that plan forward with prioritizing projects as the next step, the district said.
