With the SCUSD facing a financial deficit of $30 million, budget cuts are back on the table and set to bring changes in the upcoming 2026-2027 school year.
One of the driving factors in the budget deficit is the declining population of the district, especially after COVID-19, when many companies adapted to virtual working, allowing people to work from anywhere. Social science teacher David Ledesma has observed, however, that the issue extends far beyond the Santa Clara district line.
“Lots of people left the Bay Area. California has lost House of Representatives seats because the population of the entire state has gone down. People have moved from a higher tax state, California, to lower tax states like Texas or Tennessee,” Ledesma said. “That’s just economics. Removing taxpayer dollars means there’s less money available. Less money, but also people are leaving. Fewer people, fewer human beings, fewer butts in the seats because people are moving away because it’s cheaper to live somewhere else.”
Typically, the budget follows cycles of stability and deficit due to external reasons, such as loss of taxpayer dollars and local real estate value. Social science teacher Daniel Skapinsky believes this deficit is unlike any other the district has faced before.
“I see this lasting for longer than other cycles because I don’t see a solution. It’s a more complex issue than 2008, which was the economic crash, right? So when the economy comes back, then the taxes start coming in and then things are better again. But in this case, you’ve got to have the kids come back,” Skapinsky said.
According to the 2025-2026 SCUSD financial report, 83.2% of the annual budget goes to salaries and benefits for faculty. As such, teacher and staff layoffs are at the center of cost-reduction strategies. Despite official decisions still in the works, the effect of looming layoffs is already felt on campus.
“It really affects morale, for sure,” Skapinsky said. “There’s been a lot of stress. People are worried about getting laid off, and even if they’re confident they won’t get laid off, they’re worried about being transferred, or their colleagues being transferred or laid off. So there’s just a lot of stress, dealing with all this.”
While the district is prioritizing minimized impact on students, budget cuts could still reach classrooms. Limiting seventh periods, for example, might affect students, and Ledesma predicts that a higher student-to-teacher ratio might also affect students.
“Of course, you get more packed classes with less individual instruction. It’s sort of an are you in an Uber, or are you in a city bus? situation when it comes to schooling,” Ledesma said. “Would you rather have a class of 15 kids, or would you rather have a class of 34? Unfortunately, that’s what it comes down to. The school’s gonna pack everything.”
The budget management is an ongoing process, and while the current issue facing the district may not have a clear ending, SCUSD Chief Business Official Mark Schiel attested to the adaptability and responsibility the district will take to ensure the process goes as smoothly as possible.
“There are a lot of school districts across the state, and they’re dealing with these very same tough realities and tough decisions. Certainly, as things continue to change, we will need to continue to adjust. We have made adjustments in prior years as well,” Schiel said. “So how do we make sure that we’re making those right decisions at the right time? Things are constantly changing in the educational environment, and so we’re always looking at how we respond to those decisions.”