Fresno Unified’s budget keeps shrinking. Here’s what to expect
In recent years, new homes built in southwest Fresno and east of the city have drawn many new families and their school-aged children to the region — resulting in the construction of new schools in the Central Unified and Clovis Unified districts to accommodate the influx of students.
Fresno Unified, however, is a different story. Unlike neighboring districts, the region’s largest school district faces years of projected declining enrollment due, in part, to a stagnant housing supply.
“We’re landlocked,” said Fresno Unified Superintendent Misty Her. “We can’t build unless we build up.”
Declining enrollment, a post-pandemic increase in student absences that impact its state funding and the evaporation of one-time money place Fresno Unified in a precarious financial position in the coming years.
Now, the district — which one former superintendent called “the biggest fiscal driver from Bakersfield to Sacramento” — projects having to make cuts annually, including a $30 million deficit for next school year.
Here’s what we know.
How has Fresno Unified’s budget changed over the years?
Prior to the pandemic, Fresno Unified operated an annual budget of about $1.5 billion. The district received a lot of one-time federal funds during the pandemic to address learning loss, ballooning the district’s budget to more than $2 billion.
School districts across the nation have seen a “big spike” in revenues and expenses as they attempt to spend the dollars, said Patrick Jensen, chief financial officer of Fresno Unified.
“Now, if you look at everyone’s financials, you’ll start to see it goes back to a more normal baseline revenue cycle,” he said.
Jensen said Fresno Unified provided a lot of supplemental programs, extra instructional time, and wrap-around services in the first two years of the pandemic, such as before- and after-school programs, winter sessions, and summer school. Some of those offerings have scaled back down to pre-COVID levels, he said.
“We really tried to phase out as the grant was going away. We have a little bit of extra support still going on for some social-emotional (support programs), but other than that, we really plan to spend it all,” said Kim Kelstrom, the district’s chief executive of fiscal services. “Last year’s funding was really spent on facilities, like some of the support spaces and ventilation projects we were doing.”
How big is Fresno Unified’s budget deficit?
Fresno Unified is looking at cutting $30 million for the 2025-26 school year, according to Jensen.
Jensen said the district has planned to utilize one-time funding to offset the deficit, and made cuts in the central office’s positions, contracts and travel expenses. District officials also propose eliminating its Designated Schools program, which gives students from 41 schools 30 additional instructional minutes every day.
“A student at a Designated School would have up to 18 more days of instruction yearly compared to other students. This allows schools to start closing the gap that exists,” wrote the district website.
“We’ve tried very hard this year to make sure we’re not impacting academic programs at the school site level,” Jensen said. “The only major impact you’ll see at the school site level would be the elimination of the Designated Schools program.”
The Designated Schools program has delivered a mixed academic outcome, according to the district.
The Fresno Teachers Association strongly opposes the elimination of the Designated Schools program, arguing that the cut is taking away support from classrooms.
“This is not a budget problem, this is a ‘priorities’ problem, and they are not prioritizing our students and our teachers,” said Manuel Bonilla, the union’s president, in March.
Bonilla said the district’s reserve level is higher than the state’s required minimum of 2%, and the district invests a lot in hiring consultants and uses contractors to provide services.
Fresno Unified plans to expand the after-school programs, which are provided by contractors, to make up for the 30 minutes of instructional time, according to the district’s spokesperson Nikki Henry.
“Our Expanded Learning team has been preparing and planning for quite some time and we’re confident in our ability and capacity to support any increase in the after-school programs,” Henry said.
The elimination of the Designated Schools program at 41 sites will reduce overtime hours for some teachers, thus resulting in a salary reduction as high as a 12% pay cut, according to the Fresno Teachers Association.
The district is at an impasse in mediation with the union on mitigating the impacts of the program elimination, Henry said.
A letter from Superintendent Misty Her to parents in February showed that the district’s “last, best and final offer” to the union leadership includes a 5% scheduled ongoing salary raise and a 3% one-time payment for all staff next year, plus other off-campus transitional days and financial compensations for impacted teachers.
Fresno Unified does not anticipate any employees losing their jobs, Jensen said. However, the district will reduce some empty positions and might move some classified employees to different positions.
Why is Fresno Unified projecting annual operating deficits?
In the last few years, the district has struggled to recover its average daily attendance to the pre-pandemic level.
The district’s average daily attendance is 3% lower than its 2019 figure. In California, school districts receive state funding per pupil based on the number of students who actually show up to school, known as its “average daily attendance.” In other words, districts lose money when students miss school, no matter if it’s for a sickness or a doctor’s appointment.
For the state’s third-largest school district, which has more than 68,000 students enrolled in non-charter schools, every percentage point of average daily attendance amounts to about $10 million in state funding.
Fresno Unified is also grappling with years of declining enrollment.
In the 2017-18 school year, Fresno Unified had 70,675 non-charter schools’ enrollment. The number dropped to 68,246 for the 2023-24 school year.
For the next six to seven years, the district projects enrollment to decline by about 900 to 1,000 students annually, according to Jensen.
“One of the things that you’re going to see that we struggle with is demographic shifts around the number of children that people are having, as well as the lack of space in the school district boundaries for which there is to be new construction,” Jensen said.
Although the Central Valley has long been considered a less expensive area to live in California, and in recent years more families have moved inland due to the higher cost of living on the coast, Fresno Unified hasn’t benefited from demographic changes.
“We’re not necessarily seeing those families move into the Fresno Unified district boundaries due to lack of housing development where we’re kind of land locked, there’s not a whole lot of green space left within the district boundaries for large residential development,” Jensen said.
Therefore, the district is focused heavily on improving students’ daily attendance, he said.
Prior to the pandemic, Fresno Unified maintained a 94.5% of average daily attendance. The number currently stands at 91.6%, a slight increase from 91.3% at this time last year.
“We need to get closer to 3%, so yes, it’s not rebounding,” Jensen said. “We think that one of the issues is, during COVID, there was a lot of information going out to families, if they have any cold symptoms, they need to stay home from school. So it’s kind of retraining families on the new guidelines for when a student is capable of coming to school versus when they should stay home sick.”
How much does Fresno Unified have in savings?
The district’s reserve level represents the uncommitted fund balance from the unrestricted general fund.
According to the state law, school districts should maintain a minimum of 2% reserve, but Fresno Unified board policy requires a 5% to 10% of reserve in stable times and 2% to 4% during volatile economic times.
“Let’s say we have a 5% reserve, that’s just over two weeks of operating expenses for the district. What the reserve allows us to do is two things. One, if funding doesn’t materialize, whether at the state or the federal level, or if there’s an economic recession, that allows us to fund programs and not have to make an immediate cut.Two, the goal of the reserve is to provide the board and the superintendent the flexibility to take time to make make strategic reductions,” said Jensen.
Since the 2017-18 school year, Fresno Unified has managed to keep the reserve level above 7%, except for the 2020-21 pandemic year, when the projected reserve level dropped to 5.02%.
The school district does not foresee an optimistic economic outlook for the future. In last year’s adopted budget presentation, district staff predicted that the reserve level would be at 6.05% in 2025-26, and the number would continue to fall to 4.65% in 2026-27.
This story was originally published April 30, 2025 at 8:00 AM.
