San Rafael school district plans $5.5M in budget cuts

San Rafael City Schools will need to make about $5.5 million in cuts to keep its budgets balanced over the three-year fiscal reporting period, officials said.

“While it is still preliminary, we are hopeful that layoffs can be avoided and that reductions will occur primarily through attrition,” Carmen Diaz Ghysels, the district superintendent, said in an email. “We anticipate the board will take action on proposed reductions at the end of January.”

San Rafael City Schools, which includes separate elementary and high school districts, will need to chop approximately $1.42 million from the 2025-26 budget, including $830,000 from the elementary district and $590,000 from the high school district.

For 2026-27 and 2027-28, the district projects cuts of $2.8 million in the elementary district over the two years and $1.3 million in the high schools, Diaz Ghysels said.

“Like many districts across California, we are nearing the end of the large, one-time state grants provided in the aftermath of the COVID pandemic,” Diaz Ghysels said. Also, rising operational costs and declining student enrollment are contributing to the financial strain, she said.

“Together, these factors have resulted in structural deficits for both districts,” she said.

A structural deficit means the district will need to pull funds out of the budget reserves to make ends meet.

Bob Marcucci, the district’s deputy superintendent for business services, said trustees will vote on the proposed cuts at their board meeting on Jan. 27. The list of reductions resulted from at least four meetings of the district’s budget advisory committee, he said.

Marcucci said the cuts are necessary to maintain its “positive” budget status in the three-year reporting period that is mandated by the county and the state. A positive budget status means that a school district’s budget reserves are projected to stay above a preset percentage of annual expenses.

San Rafael City Schools has set a target goal of achieving 17% in reserves. The figure includes the 3% state minimum and 14% designated by the board of trustees policy.

Even with all the cuts, none of the budgets for the next three years is expected to realize a 17% reserves level, although they are expected to stay above the 3% state minimum, Marcucci said.

“The cuts will move us in the right direction, but it will take more time and other factors related to revenues to get to 17%,” Marcucci said on Thursday.

Marcucci, speaking at the trustees’ meeting on Dec. 16, said the projected reserves percentage in the $68 million elementary district budget is 12.4% for the current school year. For 2026-27, that declines to 9.7%. In 2027-28, the reserves are projected to decline to 7.1%.

“It’s not changing in the direction we would want it to,” Marcucci said. “But that story will likely change as we get further into the year.”

The elementary district is funded by state per-student subsidies, sometimes referred to as the local control funding formula, or LCFF. In the elementary district, the LCFF amount per each of approximately 4,140 students is $14,496, Marcucci said.

The LCFF is based on average daily attendance, plus a 2.3% cost of living adjustment for 2025-26. The elementary district also receives a state subsidy for each student in transitional kindergarten.

The San Rafael high school district, on the other hand, is community funded by local property taxes. It is also referred to as a “basic aid” district.

The amount of property taxes the high school district collects exceeds what it would receive if the state was just using the LCFF formula alone to pay per-student subsidies. The LCFF amount for the high school district is $15,240.

Marcucci said the high school district “flipped” from LCFF to basic aid at the end of last year following an enrollment decline from 2,557 students in 2024-25 to about 2,405 students this year.

“Steady revenues and less students is a recipe for a district being basic aid,” Marcucci said.

The high school district’s $42 million budget is projected to have a 5.6% reserve for the current school year, 7% in 2026-27 and 9.9% in 2027-28, he said.

“It’s definitely trending in the right direction,” Marcucci said.

Diaz Ghysels also addressed the continuing contract dispute between the district and one of its labor unions, the San Rafael Federation of Teachers. The union represents teachers and other certificated employees at the high schools.

Morgan Agnew, the union president, said at the Dec. 16 board meeting that the district was not negotiating according to the terms of a “fair share” agreement set up five years ago between the union and a previous district administration. The agreement is to distribute a certain percentage of new revenue the district receives to be used in calculating pay increases.

Diaz Ghysels disagreed.

“The bargaining teams are using a ‘fair share’ formula that calculates the proportion of projected new revenues to be dedicated to the bargaining unit, SRFT, based on several complex factors,” Diaz Ghysels said. “As negotiations continue around the use of the fair share, we remain optimistic that we will reach an agreement that is in the best interests of our students, teachers, and the district.”

San Rafael City Schools serves about 6,545 students at six elementary schools, one school from transitional kindergarten to eighth grade, one middle school, three high schools and one early learning center.