Introduction: Stockton Unified, the largest school district in Stockton, is projected to experience “planned deficit” spending in the upcoming year. The rejection of a crucial mechanism to allocate funds between different accounts has become a point of contention within the district. Despite concerns over the budget, Stockton Unified’s new Superintendent, Michelle Rodriguez, assures that the district is not deficit spending from its unrestricted general fund. However, if the current financial course continues, the district may face a deficit of $7 million by the 2024-25 school year.
Budgetary Challenges and Emergency Relief Funds: Stockton Unified’s billion-dollar budget is partly attributed to the $150 million in Elementary and Secondary School Emergency Relief funds that the district must spend by September 2024. Utilizing this one-time money can create the appearance of deficit spending. However, Superintendent Michelle Rodriguez emphasizes that the unrestricted general fund is not contributing to the deficit spending in the next fiscal year. The unrestricted funds can be allocated towards salaries and various other expenses.
Addressing Future Deficit Concerns: Rodriguez acknowledges that while $7 million may not sound significant, continued deficit spending can accumulate over time. To mitigate this, the district aims to maintain services to students while reducing unrestricted spending. It is crucial to reassess the financial course and find ways to decrease expenses to ensure a sustainable financial future.
Budget Approval with Concern: During the recent board meeting, the Stockton Unified Board of Trustees passed the billion-dollar budget “with concern.” This notation signifies that the county’s office of education will continue to monitor and evaluate the district’s financial plan, including the Local Control and Accountability Plan (LCAP). The budget will remain a working document as the district addresses financial and technical budgeting concerns raised by the San Joaquin County Office of Education.
Improving Financial Systems: To address the challenges identified, Stockton Unified plans to update its financial systems by implementing newer computer programs, Escape and Allovue. These programs will provide better controls and automation, reducing the risk of human error and streamlining financial processes. The transition to Escape is seen as a pivotal step in improving financial management.
Interfund Transfers and Contention: The board’s rejection of Stockton Unified’s Director of Fiscal Services’ request to move funds between different accounts to cover potential negative balances highlights a growing point of contention. The county office of education had previously expressed concerns about interfund transfers, stating that they masked deficit spending in previous years. Trustee Ray Zulueta considers interfund transfers to be a “bad practice,” questioning their continuation within the district.
Conclusion: Stockton Unified is navigating the challenge of planned deficit spending in the upcoming year. By leveraging emergency relief funds and reassessing financial strategies, the district aims to mitigate the projected deficit. The board’s rejection of interfund transfers reflects a commitment to address previous financial concerns. Moving forward, the district will work on updating financial systems and finding sustainable solutions to ensure fiscal stability for the benefit of students and the entire Stockton Unified community.