A $5.5-million deficit is projected to hit Coachella Valley Unified School District’s reserves fund next school year, with officials saying at Thursday’s board meeting that the financial challenges the district faces are considerably worse than they initially believed in March.

State law requires school districts to keep 3 percent of the general fund in reserves in case of emergency, which would be $7.2 million in Coachella Valley Unified.

Several factors have contributed to the deficit, including:

  • Decreased state revenue of about $400,000
  • Projected declining enrollment that would lead to a loss of roughly $2.7 million
  • A loss of $1.4 million in Title I funds the district did not spend this year. This is money allocated to school districts with a high percentage of low-income families.
  • A pattern of deficit spending during the 2016-17 fiscal year that is projected to continue for the next two years
  • Increased responsibility for employee benefits and special education costs totaling about $7.4 million over the next two years

The deficit is projected to increase to $9 million during the 2018-19 school year. 

PREVIOUSLY: With deficit on horizon, CVUSD expects $8.3 million in staffing reductions

Officials have already laid out a plan to cut about $19.7 million from the district’s $240-million budget next year – including $8.3 million in staffing cuts – but that plan was conceived when the district was expecting a considerably smaller $281,000 deficit to affect the budget two years from now, said Greg Fromm, assistant superintendent of business and finance, at Thursday’s meeting.

“This is a situation that will demand your immediate attention,” said Paul Jessup, Riverside County deputy superintendent of schools, in a presentation to the CVUSD board. “$19.7 million. That’s a big number. You may not be able to do it all at once. It may take multiple years, but there will need to be action taken soon.”

Jessup warned the board members that they would not be able to rely on revenue to rescue them. Although the state began injecting billions more into education in 2013, resulting in significantly higher revenue for districts like CVUSD with a high percentage of at-risk students, the state has almost maxed out its K-12 funding goal. That means Coachella Valley Unified will no longer see increased funding from the state other than small, cost-of-living increases. 

On top of that, local governmentsand school districts across the state bear an increasingly heavy burden for employee pension costs, which are expected to cost the district about $2 million more next year.

RELATED:Growing pension costs worry valley cities, school districts

On June 1, CVUSD will submit a plan to the Riverside County Office of Education detailing how it expects to reduce its expenditures. If the county does not believe the district will be able…