LBUSD passes booming budget thanks in part to COVID funds, but declining revenue looms

July 1 officially marks the start of the Long Beach Unified School District’s 2021-22 fiscal year, a year that looks a lot brighter than the district and its labor unions once feared.

At the LBUSD Board of Education’s most recent meeting on June 23, the board unanimously approved the district’s $1.12 billion budget for 2021-22, as well as its Local Control and Accountability Plan, its blueprint for how it will spend locally controlled money.

After a year-long budget process, the board and LBUSD executive staff were united in talking about a need to simplify things to make it easier for the public to understand the district’s finances. Some programs, such as English Learner Support, are funded from multiple sources, which makes it difficult to track exactly how much is being spent on students.

“This gets complicated when you talk about a $1.1 billion dollar budget but this integrates one-time COVID resources from state and federal, it incorporates (Local Control Funding Formula), other state and federal revenues, and Title I funding,” said LBUSD Superintendent Jill Baker.

Baker said a modernized budget tracker is coming to the LBUSD website this summer, which will make parsing things out easier.

LBUSD’s chief business and financial officer, Yumi Takahashi, reminded the board that as the state finalizes its budget some revenue could go up or down and that the district will have 45 days to revise the LBUSD budget after that.

Takahashi had been the bearer of bad news last year by presenting a bleak financial picture that anticipated the district dipping into deficit spending and quickly burning through its ample financial reserves. At the most recent board meeting, she painted a different picture, one filled with mostly good news.

“Last year, there was an expectation that there would be a protracted dip in state revenues. That has not materialized,” she said. Instead, the district received a roughly 5% cost-of-living increase from the state, as well as approximately $150 million in one-time COVID-19 relief funds from the state and federal governments, which is being used to combat learning loss as well as supporting programs to help kids with learning and emotional support as they return to campus in the fall.

Takahashi did point to some dark clouds still on the horizon in the form of declining enrollment. The district has been losing students—and thus state funding—at a rate of about 2% annually for the last several years. This year that jumped to a 3% decline, with a projection of the student enrollment dipping down to 64,418 in the 2023-24 school year. Takahashi also acknowledged that there’s still a lot of uncertainty about the pandemic’s long-term effect on enrollment.

“We’re making aggressive outreach to returning families and to new families,” she said. “This projection is very challenging in light of the current circumstances.”

The district’s financial reserves have been building since the 2008 recession when layoffs rocked the district and pushed then-Superintendent Chris Steinhauser to start saving money for the next big financial hurdle. Those reserves reached a high of $292 million at the end of 2020-21, and they are projected to crest $309 million in the 2021-22 school year. Declining enrollment is projected to push the district into deficit spending after that, and Takahashi’s presentation showed reserves beginning to drain rapidly to $177.5 million in 2023-24.

The district praised community engagement as a driving force for the budget, with programs benefiting English learners, Black students, and emotional support during the return to campus all receiving strong public support in the public.

The district’s executive director of equity, access, and college and career readiness, Robert Tagorda, said the district had 4,967 participants in its budget engagement outreach as well as 3,472 participants in the Local Control and Accountability Plan engagement.

“As it relates to the pandemic, it’s been a monumental achievement for our stakeholders and our community to be as engaged as they have been,” said Tagorda.

Boardmember Juan Benitez has been a year-long advocate for more transparency, simplicity and engagement in the budget process, and he said he was pleased with how the district’s budget aligned with what he heard from his constituents in the Downtown area.

“It’s tough to participate right now in our systems, but our budget reflects in the most intentional way how important community voice is in making decisions over that $1.1 billion dollars,” he said.

A summary of the district’s financial allocations can be found on a single page here and the entire budget is available here.

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