The Santa Monica-Malibu Unified School District Board of Education voted unanimously Oct. 1 to ask county officials, once again, to excuse the district from a state rule requiring it to spend 55% of its expenditures on classroom salaries and benefits.
The district fell short of the mark by 7.66%, or $16,096,765.33, in the 2025-26 fiscal year. District officials attributed the gap to one-time state and federal money that must be spent on items other than teacher pay.
The request now goes to the Los Angeles County Office of Education, which has approved the district's exemption each of the past six to seven years, said Gerardo Cruz, the district's assistant superintendent of business and fiscal services.
District leaders had expected the annual waivers to run their course through the 2028-29 school year. Cruz told the board that is no longer likely.
Board member Stacy Rouse recalled projections from when she began four years ago that the exemptions would end sometime between 2025-26 and 2027-28, and asked whether that still held.
"Good question and good memory," Cruz said.
He noted the district recently received about $12 million in additional one-time categorical funds for restricted purposes, money it expects to spend over at least the next six to seven years. As for whether the exemptions would end in 2028-29, "The short answer is no," he said.
"We're actually going to likely expand that runway for an additional five to six years," Cruz said.
Under Section 41372 of the California Education Code, a unified school district must devote 55% of its expenditures to classroom salaries and benefits. The requirement may be waived if the penalty would cause a district serious hardship.
Cruz said the district has "benefited greatly" from COVID-19 recovery and learning recovery funds, as well as newer state grants such as the Learning Recovery Emergency Block Grant and the Student Support and Professional Development Block Grant. Those dollars are largely restricted to technology, personal protective equipment, other equipment and instructional materials, he said.
Because the one-time money counts toward the state's calculation but generally cannot go to salaries, the district's percentage drops.
"The catch-22 is a lot of the time those categorical funds are not meant to be spent on teacher salaries because we don't have them forever and they're one-time funds, so we don't want to commit ongoing costs to one-time funds," Cruz said.
The district is far from alone, he said. When the state's Local Control Funding Formula took effect in 2012-13, 9% of California unified school districts missed the 55% mark. By 2024-25, the most recent year with data, that share had climbed to 31.3%. Elementary and high school districts have seen similar increases, Cruz said.
"This is a phenomenon not specific to us, but it's pervasive throughout the state," he said.
Board member Jennifer Smith said she was surprised the figure isn't higher and wondered whether other districts were spending the money on teachers in ways they could not sustain. She said districts that use the one-time money for staff later have to reduce staff, "and it's painful."
"It shocks me that the entire state doesn't apply for this," Smith said.
Cruz said she had "hit the nail right on the head." All districts face the same deadlines to spend the funds, he said, but many are using them to pay classroom instructional salaries. That lets those districts meet the 55% threshold while forcing them into the staff reductions that districts around the state carry out each March.
He credited the board for "not tying one-time revenues to ongoing expenditures like classroom salaries."
"We could absolutely move to that model. I'm not sure that we would want to," Cruz said.
No other questions were raised before the board voted to approve the application.