The Los Altos School District Board of Trustees unanimously approved its 2025-2026 second interim financial report on March 16, saying the district remains financially stable even as rising costs, fluctuating revenues and broader economic risks challenge its budget.
The report, required twice annually, reconciles budget assumptions from July 1 through January and provides multi-year projections to guide fiscal planning.
The update showed modest growth in local revenue, including $10.6 million in parcel taxes, donations and leases, while state and federal funding remained stable. LASD continues to pay $11.6 million to local charter schools, which officials described as having a “tremendous financial impact,” saying the payments represent a significant ongoing reduction to the district’s available revenue. The report also highlighted a $200,000 grant from the Bay Area Air Quality Management District for deferred maintenance.
On the expenditure side, salaries and benefits decreased by $219,000 due to unfilled positions, though step and column increases now total approximately $565,000 annually. Supplies and services saw a minor uptick, partially funded by donations. Transfers were made to support the cafeteria fund, which covers the district’s universal meals program, as well as deferred maintenance. Programs such as Transitional Kindergarten (TK) classes and the cafeteria initiative are unfunded mandates that add significant costs to the general fund.
Assistant Superintendent of Business Services Erik Walukiewicz highlighted ongoing financial pressures, noting, “When we adopt our budget in June, we don’t know what our healthcare rates are until July, so we adopt very conservatively in December … then we adjust our budget.” He also said, “Some of the suppliers that we buy things from have increased, utilities always comes up, it seems like,” and noted that timing challenges with the CalPERS retirement plan add uncertainty. Chromebooks, for example, have risen roughly $100 per laptop.
Walukiewicz also addressed broader economic factors, saying, “A lot has changed since interim about global things … geopolitical instability in the world right now is a concern.”
Looking ahead, the district’s multi-year projections anticipate moderate property tax growth of 4% to 5% and a reduction in one-time local and state grants. Walukiewicz expressed caution about future revenue: “Right now at the second interim, we’re going to go with 4% and then in 27-28 we do not know that number. So, we’re going to budget very conservatively.” Beginning fund balances are projected to fall by $2.6 million this year, with slightly smaller declines of $2.3 million to $2.5 million expected in each of the next two years.
“We can certify and meet our financial obligations for the current year and two subsequent years,” he said.
Walukiewicz also pointed to broader economic risks, particularly the potential impact of AI investments and stock market volatility: “There’s a lot of concern in the state about the AI bubble. … Personal income tax is the biggest driver for revenue for the state, so if there’s this overinvestment or loss of stock volatility, we just don’t know how that’s going to impact our economy.”
Updated revenue and expenditure data will be incorporated into the district’s upcoming budget adoption and first interim report.
