San Diego Unified is staring at a projected $47 million budget shortfall for the 2026-27 school year, a gap district leaders say will force hard conversations about programs, staffing and student services. Interim Superintendent Fabi Bagula is pointing squarely at long-running special education underfunding as the biggest culprit, with years of declining enrollment and rising employee costs piling on. District officials plan to walk the school board through a First Interim Budget briefing on Dec. 10, as they sketch out options to close the hole.
As reported by KPBS, Bagula recorded a video message for staff and families breaking down the projected deficit and outlining the district’s plan to weigh both cuts and possible new revenue. KPBS also noted the district’s general reserve is hovering around 2%, the minimum level the state views as acceptable.
Special education shortfall drives the gap
In a district news release and video, Bagula said special education services cost San Diego Unified more than $400 million every year, while the district receives roughly $125 million from state, federal and local sources. That leaves more than $275 million annually that has to be covered by the general fund. “This is not sustainable and it’s not fair to our children and families,” Bagula said in excerpts posted by San Diego Unified.
According to the district, leaders have started assembling a coalition of community figures to push for a more stable special education funding solution. Any spending changes, officials say, will be run through the lens of student wellbeing and core academic progress, not just what looks good on a spreadsheet.
Declining enrollment and tight reserves
District leaders also point to a multiyear slide in enrollment and steadily rising employee costs as key reasons revenue has sagged while expenses climbed. As KPBS reported, those pressures have left the district with very little cushion: reserves are sitting near the state’s 2% minimum requirement.
Board briefing and public timelines
The district’s Chief Financial Officer is set to present the First Interim Budget at the Dec. 10 board meeting, laying out the numbers in detail. Staff have also scheduled a community workshop on Dec. 17 so families, educators and other residents can get a closer look at the situation and offer feedback…