Maybe the Santa Monica-Malibu school district’s financial outlook isn’t so gloomy after all — at least for now.

The district has a projected surplus of $1.07 million in its unrestricted general fund for the 2015-16 school year, according to figures reviewed by the Board of Education during its May 27 meeting.

The latest calculation stands in stark contrast to the projected $7.4-million deficit the board assessed in its first look at the budget in early May. The change is due in large part to an influx of funds reflected in Gov. Jerry Brown’s revised state budget.

Money from the Local Control Funding Formula, which is gradually putting more responsibility on the district to manage state funds, is coming in ahead of schedule, officials said. The district’s latest budget assumes $15.9 million in LCFF state aid, a significant bump from the $8.58 million it received in 2014-15.

An increase in Prop 98 funding, a state initiative that impacts K-12 education expenditures, is also expected.

“We are pleased that Governor Brown continues to fulfill his promise toward the importance of public education,” district Supt. Sandra Lyon said in a statement. “While we plan to take a close look at our budget going forward, this revision allows us to continue to provide a rigorous academic program and high-quality visual and performing arts programs to the students we serve.”

The district’s preliminary budget will be reviewed again at the June 11 board meeting, and a public hearing is planned for June 24. Final adoption is expected on June 29.

Projected revenues in the district’s unrestricted general fund currently top $102.5 million. Expenditures totaling about $101.5 million include more than $89 million for staff salaries and benefits, $9.1 million for operating costs and $2.6 million for supplies and books.

The projected surplus comes despite an expected increase of $2.5 million in employee benefit costs in the upcoming school year.

The district’s special education department re-evaluated its staffing needs and plans to cut the equivalent of 6.35 full-time positions, according to a district report.

The budget assumes a $2.2-million contribution from the Santa Monica-Malibu Education Foundation for next school year and $2.5 million for each of the following two years.

District staff recommends that money raised through the nonprofit organization’s controversial fundraiser be spent on instructional aides, arts programming and supplemental grants.

Literacy coaches and secondary support staffers, previously funded through SMMEF, will likely become general fund expenses. The foundation has also supported professional development, which is now expected to be funded through Title II.

Meanwhile, although the district appears in better financial shape for next year, it is projecting a $4.8-million deficit in its unrestricted general fund for the 2016-17 school year and a $5.4-million hole for 2017-18.

The district plans to create a superintendent’s committee to review budget details and make recommendations by the end of January.

Officials are targeting a total of $1 million in cuts across the district, which could affect programming as well as administrative and clerical support. The district is also aiming to cut $500,000 in overhead costs.

Contact Jeff Goodman at 310-573-8351, or on Twitter.

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