‘Heartbreaking and Sobering’: Pasadena Unified Faces a Crisis Decades in the Making

In the Great Room at PUSD headquarters Wednesday night, the mood was grim. Words like “heartbreaking” and “sobering” hung in the air as members of Pasadena Unified School District’s (PUSD) Superintendent’s Budget Advisory Committee met for the final time. The mission before them was monumental — to recommend tens of millions in cuts that could determine whether the district survives in its current form.

The district, which serves roughly 15,000 students, is staring down a projected deficit of $71 million by 2027-28. To avert insolvency, officials say $30 million to $35 million in reductions must be identified for 2026-27.

Without decisive action, PUSD could face an extraordinary outcome—a state takeover through the Los Angeles County Office of Education (LACOE) as soon as January 2026.

LACOE will make this determination based on PUSD’s First Interim Report, due December 15, 2025—a date LACOE officials called ‘critical’ to the district’s fate.

In an October letter, LACOE Director of Business Advisory Services Octavio Castelo warned that the district faces a “tough—if not impossible—financial conundrum” and must issue reduction-in-force notices by spring.

An analysis of the district’s own financial reports shows that PUSD’s structural deficit has ballooned with alarming speed. The district’s operating shortfall quadrupled from $7.4 million in 2023-24 to $29.3 million in 2024-25, a 296 percent jump in a single year.

For a time, pandemic relief and fire-recovery dollars hid the cracks. One-time COVID-19 funds provided $62 million in temporary aid, allowing the district to maintain services and staff levels that now appear unsustainable.

“It’s hard to dial back,” Superintendent Dr. Elizabeth Blanco, who has served on three of the district’s four past consolidation committees, said Wednesday. “We had the opportunity to provide a lot of extra services to our families with the COVID money. So it’s hard to dial back.”

The Eaton Fire’s aftermath and related recovery costs further complicated district finances, delaying several long-term asset-management projects designed to generate steady income.

At Wednesday’s meeting, Dr. Blanco’s words carried a mixture of realism and resolve. She acknowledged that PUSD’s financial recovery could include school consolidations, though she stopped short of confirming any plan.

“Every community is unique,” she said. “You can have some more efficiencies in some areas, but you really hurt the community. And some of it is long-lasting pain.”

California law now requires that any consolidation include a state-mandated equity analysis, a process that can take up to a year.

“So if you were going to do something like that, it would not happen in time for this fiscal stabilization plan,” she added.

PUSD’s leadership is searching for new ways to bolster revenue. Asset-management projects, once envisioned as lifelines, have stalled since the fire. Still, Blanco pointed to staff housing developments expected to generate between $1.2 million and $2 million annually once completed in two years.

She also said in an interview that tightening lease agreements and enforcing custodial-cost reimbursements at district facilities are expected to bring in another $500,000 this year. The district has also issued an RFQ for redevelopment of the Linda Vista property, while pledging to preserve the site’s parkland.

“We’re looking for a long-term ground lease that fits everyone’s needs,” she said.

Meanwhile, grant-funded programs are under review to ensure “the grants work harder” — that is, to shift salaries and overhead for certain staff whose work aligns with grant objectives.

For many on the advisory committee, the numbers only tell part of the story. Wednesday’s tabletop discussions were filled with anxious questions: Which schools might close? Which programs could vanish? Which staff members will get pink slips in March?

“It’s complex,” said Hilda Ramirez Horvath, the district’s public information officer, explaining that fluctuations in hiring, emergency expenses, and post-fire costs make budgeting unpredictable. “Not everything is predictable when you’re dealing with humans — or when you are working with children.”

For a district still healing from pandemic disruptions and the trauma of the fire, the idea of deeper cuts feels almost unbearable.

But the clock is ticking.

On November 13, the PUSD Board will convene a study session to review the Budget Advisory Committee’s recommendations. Then, on November 20, the Board will vote on which proposals to advance.

While the legal deadline for issuing staff reduction notices is March 15, 2026, LACOE could assign a fiscal expert months earlier if the December report shows insufficient progress.

Between now and then, the district must finalize a fiscal stabilization plan and submit its first interim report to LACOE. If the plan fails to satisfy county and state requirements, LACOE could step in to assume fiscal control — a rare and painful step that would strip PUSD’s board of financial authority.

Longtime district watchers recall earlier rounds of painful consolidations — and the community protests that followed. “Whenever that subject comes up, it’s very difficult, very painful,” one observer said, recalling past meetings that stretched late into the night.

Despite the difficult choices ahead, Blanco insisted the board would “do the right thing” to protect students.

“There is a moral imperative here,” she said. “The moral imperative is for us to make sure there is a PUSD that’s wonderful for the children that are here and for the children of the future.”