The Santa Monica-Malibu Unified School District Board of Education has adopted a 2026-2027 budget in which spending is projected to outpace revenue, approving a plan district leaders say protects classroom programs while preserving long-term financial stability.
The board approved the budget on a 6-0 vote, with one member absent, during its June 23 regular meeting. The spending plan calls for about $226.2 million in total revenues and $237.9 million in total expenditures across the district's unrestricted and restricted funds.
Officials said the budget was developed over months of planning and analysis and aligns the district's resources with its priorities, including academic achievement, special education, maintenance of facilities and operational excellence. They said the gap between revenues and expenditures was anticipated and accounted for in a multiyear financial strategy.
"The adoption of this budget reflects months of careful planning, analysis and collaboration," said Gerardo Cruz, the district's assistant superintendent of business services and chief financial officer. "Our focus remains on maintaining fiscal solvency while continuing to support high-quality educational programs and services for students. While expenditures are projected to exceed revenues during the 2026-2027 fiscal year, the District has planned for this through its multiyear financial strategy and will continue monitoring expenditures, reviewing revenue projections and identifying efficiencies to maintain long-term fiscal sustainability and reduce deficit spending."
The budget includes about $142.4 million in Local Control Funding Formula revenue. The district's finances are also supported by local property taxes, Measure R parcel tax revenue, joint use agreements, community partnerships and other local funding sources that officials said continue to strengthen educational opportunities for students throughout Santa Monica and Malibu.
Total instructional spending is projected at about $169.7 million, covering classroom instruction, educational services, special education, school site operations and student support programs.
The district projects enrollment of about 8,548 students in 2026-2027. The budget was built using state and local funding assumptions, including a 4.31% cost-of-living adjustment and continued support through local revenue sources and community partnerships.
As part of its long-term planning, the adopted budget maintains the state-required reserve for economic uncertainties and sets aside additional board-designated reserves intended to support future financial obligations and preserve stability during changing economic conditions.
District staff noted that schools across California, including Santa Monica-Malibu, continue to face financial pressure from rising operational costs, growing employee health and welfare expenses and the expiration of pandemic-era funding sources.
Despite the projected deficit spending, the district said the adopted budget demonstrates it is on track to meet its financial obligations for the current fiscal year and the following two fiscal years. District leaders characterized the plan as evidence of a continued commitment to fiscal responsibility, transparency and strategic financial planning.
The adopted budget will be submitted to the Los Angeles County Office of Education in accordance with California law.