Pasadena Unified Again Certifies “Positive” Budget but Officials Warn Financial Pressures Remain

The Pasadena Unified School District Board of Education on Thursday certified the district’s second interim financial report as “positive,” indicating that the district can meet its financial obligations for the current fiscal year and the following two years, even as administrators cautioned that the system remains financially fragile.

District officials said the report reflects that Pasadena Unified is projected to meet its financial obligations for the 2025-26 fiscal year and the two subsequent fiscal years. Trustees voted 7-0 to approve the certification during a special board meeting Thursday evening.

However, administrators and board members said the district’s financial position still depends on a delicate balance of recent budget reductions, uncertain state funding and enrollment trends that continue to affect school revenue.

The report reflects the district’s financial position as of Jan. 31, officials said, and does not include several actions and potential revenues that have emerged since that date.

For example, district officials said the additional reductions approved by the board on Feb. 26 are not reflected in the second interim report because the document represents the district’s financial status as of the end of January.

Even as the district certified its ability to meet financial obligations, Superintendent Dr. Elizabeth Blanco and other officials warned against interpreting potential one-time funding sources as a solution to the district’s structural financial challenges.

Blanco cautioned that Pasadena Unified has historically faced difficulties when districts restore positions or programs using temporary funds.

“We’re really trying to move away from that,” she said during the discussion, noting the risk of adding ongoing commitments based on revenue that will not continue in future years.

Officials said the district may receive additional funding later in the year from several sources, including fire-related attendance relief, delayed state aid and other one-time grants. But district leaders cautioned that those temporary revenues cannot be relied upon to fix an ongoing mismatch between revenue and spending.

A potential factor affecting the district’s finances involves a J13 submission approved by the California Department of Education related to attendance disruptions caused by recent fires.

District officials said the approval allows Pasadena Unified to count additional average daily attendance funding associated with those disruptions. Because the state calculates funding based on a three-year attendance average, administrators said the adjustment could affect revenue projections over the next three years.

However, that adjustment has not yet been reflected in the second interim financial report presented Thursday.

Administrators also said several other possible funding sources — including learning recovery funds and discretionary grants — were not included in the report because the district is still awaiting further guidance or confirmation from state and county agencies.

District staff also noted that the governor’s proposed state budget includes a projected $2.9 billion shortfall and a delayed $5.6 billion settle-up payment owed to school districts, both of which contribute to uncertainty about future education funding.

At the same time, officials said the district continues to monitor enrollment trends closely, including transitional kindergarten participation, out-of-district permits and whether families displaced by the fires return to Pasadena Unified schools.

Financial projections presented to the board showed that without fire-related revenues and expenses, the district expects a positive unassigned ending fund balance but anticipates deficit spending in the 2025-26 fiscal year. With fire-related revenues and expenses included, however, the district expects to record a surplus in 2025-26.

Student representatives also addressed the board during the meeting, saying the Student Assembly and Student Council voted unanimously to support the certification.

The student representative said the vote reflected the understanding that rejecting the certification would signal that the district could not meet its financial obligations, but described the decision as difficult in what was called a “time of loss” for the community.

Pasadena Unified’s certification Thursday indicates that, based on current projections and confirmed funding sources, the district expects to meet its financial obligations for the current fiscal year and the following two years. Officials said careful financial management will remain necessary as enrollment patterns and state funding decisions continue to evolve.