School districts throughout the state, including Santa Monica Malibu Unified (SMMUSD) are experiencing a fiscal windfall due to a surge in state payments linked COVID-19 but officials are warning the surplus cash is a temporary blip and not part of an ongoing change to funding. 

SMMUSD revenue for the 2019/20 school year increased by $1,488,977, more than triple the revenue increase for the prior year. District revenues are up 6 percent overall.

Most of the additional income is from three sources. District officials said it received COVID-19 funds that were used for allowable expenses relieving the burden on its Unrestricted General Fund. Sales and property tax revenues were higher than expected and the District also saved money as a result of school/office closures. 

With most students and staff working from home as well, the district did see fewer lawsuits than prior years.

SMMUSD made it clear this was one-time money due to the pandemic and they likely will still see a deficit this school year. The district still has a structural deficit that must be corrected and SMMUSD has a difficult time ahead with declining enrollment due to population changes. 

“Our unaudited actuals from the 2020-21 school year reflect an unexpected surplus of $9.6 million, which is very good news, however, we must remain cautiously optimistic in that this is largely attributable to the injection of one-time funds that we do not expect to continue,” said Board President Jon Kean. “The situation in which our district has found itself is similar to that in which many school districts have found themselves this year.  When checking with neighboring school districts, their budgets reflected similar surpluses. In other words, our experience is not anomalous. However, the hard work that the district engaged in prior to the pandemic regarding budget reductions was also responsible for some savings achieved this school year.”

Kean said school districts use a conservative approach to budgeting. He said SMMUSD continues to have a small structural deficit although budgetary actions taken by the School Board in the years immediately prior to COVID-19 have reduced that structural deficit and will continue to do so.

daniel@smdp.com