SLO County school districts face layoffs due to budget cuts. What will it look like?
School districts in San Luis Obispo County will head into the new year with some drastic decisions to make.
A slew of SLO County districts will be forced to cut their budgets in 2025 due to declining enrollment, a multi-billion-dollar state budget deficit and the expiration of COVID relief monies.
The budget cuts will likely result in staff layoffs and reductions in school services.
Leaders from the San Luis Coastal, Paso Robles, Lucia Mar, Atascadero and Templeton districts spoke with The Tribune about their budgetary struggles.
Here’s what they had to say.
Why are districts cutting their budgets?
School budget challenges are not unique to SLO County.
Statewide, California schools are experiencing enrollment declines. Over the last five years, enrollment has stagnated or dropped in most SLO County districts. And because districts are funded based on average daily attendance, fewer enrolled students equals less money coming in.
For a while, districts were able to fill some of the gaps with one-time COVID relief funds, which many districts used to hire or retain temporary staff, including paraprofessionals, counselors and other support staff, despite the reduction in students.
But most remaining COVID funds had to be committed by Sept. 30. In some districts, the loss of enrollment compounded with the expiration of COVID funds leaves behind multi-million-dollar budget deficits.
In 2025, the Paso Robles Joint Unified School District will take efforts to reduce its $4.9 million structural budget deficit and the San Luis Coastal district will attempt to remedy a $6 million structural deficit.
The Lucia Mar and Templeton districts will also modify their budgets to phase out the one-time COVID dollars.
Leaders from the Atascadero district said they do not anticipate major budget cuts but are monitoring the state budget situation closely. Coast Unified did not respond to The Tribune’s request for comment.
Making budget adjustments takes precision, school leaders say — filling school budget gaps isn’t as simple as moving money around.
Much of the state funding for schools is restricted, meaning it must be used for specific purposes. The same goes for money received through school bonds, which is limited to the uses outlined in the bond proposal approved by voters.
Bond money, which often goes to facilities and infrastructure, cannot be used to pay salaries.
And in most districts, more than 80% of unrestricted funding is earmarked for salaries and benefits. So, when districts are faced with eliminating millions of dollars in costs, staff typically take the brunt of the cuts.
School leaders expressed exasperation with the way districts are funded.
“It’s just incredibly frustrating the way we fund education,” said Jennifer Loftus, Paso Robles’ superintendent. “We’re trying to fix ongoing problems with one-time funding.”
San Luis Coastal Superintendent Eric Prater said that while one-time monies are helpful, they can also be a “poison pill.”
“The one-time COVID funds gave us a glimpse of what properly funded schools can do for public education,” Prater said. “Until California provides sustainable, adequate ongoing funding, we will continue to have these ups and downs across the state.”
He added: “We are short-sighted when we apply politically convenient one-time resources to solve an ongoing need among our children. We can and should do better.”
What kind of cuts will be made?
In Paso Robles, district leaders will take action to fill a $4.9 million structural deficit in early 2025, but cuts will likely continue to occur over the next two years, Loftus told The Tribune.
The district’s deficit is a culmination of the same factors that impact other districts, Loftus said.
The district’s long-awaited aquatics center, which is currently under construction, is funded by a school bond measure and is not related to the deficit.
Over the past year, district leaders already have worked to cut day-to-day operating expenses to ease some of the budgetary pressure. But with another nearly $5 million to eliminate, there’s still a long way to go.
The school board recently approved an early retirement incentive plan that resulted in over 50 employees deciding to retire early — retirement-age educators are typically the most costly for districts, since they receive higher salaries compared to new hires.
The district is also eliminating jobs by not filling vacant positions after an employee leaves.
And throughout January and February, district leaders will work to further adjust staffing levels to match enrollment, which will likely result in layoffs across the board, Loftus said.
These decisions will be made at public school board meetings.
“When we look at cutting, we’re looking at doing so equitably,” Loftus said. “It’s not just classified employee groups that are being impacted. It’s all employee groups. It’s both certificated, classified, administrative and district-level positions. So as much as possible, the reductions will be felt equitably across the system.”
Loftus also noted that she’s received comments that staff should not have received raises or should be paid less.
She told The Tribune: “We do live in a very high-cost area, and we do value our employees, and we do want to retain the staff that we have. And so not providing them with a livable wage in our community is also not to the benefit of our school district. It actually costs us more to recruit and train and have constant turnover than it does to pay the high-quality staff.”
Leaders in the San Luis Coastal Unified School District will also take action to fill a $6 million deficit projected for the 2025-26 academic year.
Prater told The Tribune that while the district experiences challenges similar to other districts, it also deals with some unique hurdles.
The San Luis Coastal Unified School District is one of a few “basic aid” districts in California, meaning it receives most of its funding through local property taxes rather than through the Local Control Funding Formula.
Because of its basic aid status, Prater said, San Luis Coastal doesn’t receive state funding for programs like transitional kindergarten, which districts are now required to offer free of charge to all 4-year-olds. For San Luis Coastal, transitional kindergarten is an unfunded mandate, Prater said.
Additionally, Prater told The Tribune that the district’s localized funding has decreased with the depreciation of the Diablo Canyon nuclear power plant.
The district has received payouts authorized under SB 1090 to counter the reduction in funding, Prater said, but the final $4.6 million is set to hit the district in the 2025-26 school year, resulting in added budget concerns.
Like other districts, San Luis Coastal used one-time COVID money to fund staffing positions even as the district’s enrollment leveled out, Prater said.
The district used the money to fund 173 full-time positions focused on supporting academic interventions and mental health needs, including over 50 certificated, non-teaching staff, like counselors and psychologists. The increase included only 1.5 administrators, according to district data.
“The most challenging part of this situation is that the interventions and supports we have implemented over the past five years are working for our kids,” Prater said. “The fact that we received one-time money to solve an ongoing educational need really hurts.”
The San Luis Coastal Board of Trustees will take action on the budget in the coming months.
The Lucia Mar and Templeton districts will also soon see budget cuts.
Lucia Mar spokesperson Amy Jacobs told The Tribune that the district will be making “thoughtful” staffing adjustments to get the numbers back to pre-pandemic levels.
Templeton superintendent Edd Bond told The Tribune that the district is looking at a “modest” budget deficit for the 2025-26 academic year.
Templeton will likely eliminate three to five positions through attrition. Though leaders hope to keep the reductions out of the classroom, Bond said it is possible that one to two teaching positions will be eliminated.
Leaders across all the districts told The Tribune they hope the cuts will have a minimal impact on students.
Loftus said she plans to go through the process with empathy for the Paso Robles employees who will feel the biggest impact.
“I think we’ll have to work through that together as a school district community. But first, I think recognizing that there is going to be an impact and being very honest about that is probably most important. To think that this isn’t going to have an impact would be really foolish,” Loftus said.
Prater emphasized that despite the challenges, San Luis Coastal will keep its focus where it needs to be, on students.
“Educators tend to take what we are given and make the best of the circumstances,” Prater said. “This time will be no different. The load on our staff is considerable, and next year it will be even more. However, the students will still be placed front and center. We will support and serve them in the best way possible — whatever it takes. It’s what we do.”
This story was originally published January 8, 2025 at 2:33 PM.
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