VCUSD Approves Qualified Second Interim Budget, Plans Further Cuts to Address Rising Deficit

VALLEJO, Calif. – At Wednesday night’s Board of Education meeting, the Vallejo City Unified School District (VCUSD) approved its second interim budget report, which was certified as “qualified.” This status indicates that the district may require assistance to fulfill its financial responsibilities during the current or the next two fiscal years.

In addition, the board approved a resolution calling for additional budget cuts in the 2026–27 school year. VCUSD Superintendent Rubén Aurelio previously cautioned the community that the recent school closures and consolidations were only the first phase of cost-saving measures.

“Although these decisions are difficult, they are necessary for the long-term fiscal stability of our district,” Aurelio said. “We must ensure that we remain able to meet the needs of our students and staff, both now and in the years ahead.”

The second interim budget, covering financial data through Jan. 31, reflects an increase in deficit spending from $20 million (after the first interim) to $24 million. This $4 million jump follows a district-wide sweep of unused funds in unrestricted budgets.

According to the report, three main factors contributed to the higher deficit:

1. A net rise in special education costs of approximately 12.5 million—such as additional expenses for non-public agencies.

2. Net charter shifts (the movement of students between VCUSD non-charter schools and county-authorized charter schools) primarily reduced the Local Control Funding Formula (LCFF) by nearly $2 million.

3. As noted above, recapturing unspent available unrestricted supply and service balances for $10 million. 

The district provided five-year financial projections in the second interim report as part of standard practice. In 2025–26, the projected deficit is about $20 million, climbing to nearly $23 million in 2026–27. In 2027–28, the district projects a $26 million shortfall, matched by $26 million in cuts, and in 2028–29, the district projects a $30 million deficit with $29.5 million in reductions. These projections remain valid only if the district continues its current spending without making any adjustments.

Despite the challenges that the district will face in subsequent years, budget enhancements are being reviewed to help decrease our deficit spending. These include a one-time transfer of $8.5 million from our reserves in 2025-26 and the inclusion of the $6 million sale of the Rollingwood property in the 2026-27 fiscal year. 

Staff will continue to prioritize attendance as it determines our state funding. The state funds the district’s average daily attendance (ADA) using a three-year average of 8,591, reflecting an 88 percent student attendance rate. 

As the district looks ahead to these fiscal challenges, it continues to reduce expenses through further school closures, consolidations, and staff reductions. Although the district previously relied on one-time funds and managed declining enrollment to temporarily avert financial strain, many districts across the state, including VCUSD, now need to “right-size” their operations and budgets.