Budget Solutions 2024-25

There are several drivers of the current deficit. Two of them are COVID funding expiring and enrollment declines. 

The state economy is another. As the state faces financial challenges, it affects how much it allocates for education. As an example, cost-of-living increases to the base funding vary year-to-year.

As the state revises its projections for school funding, this changes our projections for our own revenues and our reserve balance. Currently, the state has a multibillion dollar deficit. For HUSD, the state’s recent economic downturn has resulted in an average of $10 million per year less for 2024-2026.

The state budgeting process for next year begins in January when the governor submits his budget. That is when school districts will begin to get an idea of funding for 2025-26.

In addition to state funding woes, HUSD has seen a marked increase in the number of students who are in need of special education services in response to the impact of COVID. The costs for many services are greater than the funding that we receive from the state and the federal government. As more students qualify for these special services, our costs increase.

The state allocates funding based on “average daily attendance,” or ADA. This is calculated by dividing the number of days of student attendance by the number of calendar days that school was taught. Each daily student absence costs HUSD approximately $72 in potential funds. 

However, enrollment is important because fewer enrolled students means fewer students who can attend school.

Statewide enrollment trends show continued decreases due to declining birthrates and families moving out of the state. Since 2012-13, the state has experienced a loss of nearly 400,000 (roughly 6.3 percent) students. If current trends hold over the next 10 years, a further decline of almost 620,000, or 10.7 percent, in total enrollment is projected. These declines are hitting coastal communities especially hard.

As far as attendance, rates hit historically low levels during the pandemic nationwide. The rates are recovering at HUSD and elsewhere, but there is still room for improvement.

Common reasons for missing school include:

• Barriers that impede a student from getting to school.
• Negative school experiences such as bullying.
• Lack of engagement due to students feeling little or no connection to school.
• Misconceptions by families about the importance of attendance, particularly at lower grades.

At this point, school closures are not being considered.

Adult School funding structures are independent of district general funds. Budget solutions should not have an impact on Adult School programming.

The state is providing free lunch and breakfast for all students as a part of regular school funding. This began shortly after the pandemic. At this time, we expect this to continue.

Generally speaking, voter-supported bond monies are used to fund capital projects. Those are not impacted by potential budget cuts.

Bond monies can only be used on facilities projects, such as school construction or improvements. Those one-time funds cannot legally be used to support the day-to-day operations of the district. Since 2006, HUSD has been working through a comprehensive plan to upgrade aging classrooms and school facilities, many of which are over 60 years old. Examples of those projects are here. That work will continue.

Funds raised from selling properties can only be used for other types of capital projects. These funds can't be used to pay for general operating salaries. Moreover, the sale of properties only generates one-time revenue, which does not help cover ongoing costs.

The adopted budget for 2024-25 for unrestricted funds included $211 million in costs. The budget includes another $177 million in restricted funds.  Approximately $59M in unrestricted funds are used to to cover shortfalls in restricted programs that are not fully funded (contributions).

See the budget fact sheet here.