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San Marcos Unified faces growing budget deficit ahead of new leadership

SAN MARCOS — As school board elections near and the San Marcos Unified School District (SMUSD) has begun transitioning elementary and middle school students back to in-person learning, the district’s budget deficit is projected to steadily increase over the next few years.

In its most recent budget, approved in July, the district projected a roughly 12% budget deficit in the fiscal year 2020-21, which is more than $29,000,000. The budget also assumes the district’s projected cuts will be at $14 million for this fiscal year.

By FY 2022-23, SMUSD is expected to face a deficit of about 16%, with anticipated cuts at about $4.5 million.

SMUSD’s fiscal future has been shakier since the start of the COVID-19 crisis; however, the district has been facing structural deficits since before the outbreak began.

The school district, which serves about 21,000 students in North County, narrowly avoided anticipated deficits for their 2018-19 school year but has shown a steady downward slide since then.

In fact, the district has been projecting a budget deficit since the 2017-2018 adopted budget.

Declining enrollment, increased cost of special education and the increased contributions to pensions are all factors that school officials point to as reasons for deficits like these.

Unlike other North County school districts including Oceanside and Escondido Union, however, San Marcos saw a steady increase in enrollment before COVID-19.

After the start of the COVID-19 crisis, school districts across North County, including SMUSD, have seen a decrease in enrollment and are all feeling the financial impact.

According to state law, if a district remains in a deficit for too long, it may lose the authority to govern itself and be placed under the control of the State Superintendent of Education.

To avoid this, SMUSD has had to make steep cuts and, in recent years, the district has even had to dip into its reserves.

“Like many other school districts in California, San Marcos Unified will be facing a very challenging financial period over the next several years. The state revenues that the district depends on are down due to the pandemic and this means no COLA (cost of living adjustment) and possible revenue reductions for the next two years,” said Vincent Christakos, SMUSD’s consulting chief business officer.

Christakos added that the district will provide the first Interim Financial report in December, which will include actual revenues and expenses through Oct. 30, 2020, and will be updating the budget for the rest of the 2020-21 fiscal year as well as the multi-year projections for the next two years.

Last month, the district’s superintendent, Dr. Carmen García, abruptly resigned amid increased tensions with the board and the district’s families. The district also has three board seats up for election next week. The new board will be responsible for appointing a new superintendent.

The SMUSD community has widely expressed how hopeful they are that new leadership and new representatives will also mean a more stable fiscal future for the district.