Something’s got to give … is a four-word summary of the implications of Acalanes Union High School District’s (AUHSD) 2026–27 budget.
There are lots of numbers to back that summary up: projected revenues of $106.3 million, down just over $2.4 million from last year’s roughly $108.8 million (all numbers rounded to the nearest $100,000).
Even after about $2 million in spending cuts over the past two years, 2026–27 spending is projected at about $107.8 million – still roughly $1.5 million more than revenue, according to a budget approved at the May 20 Board of Governors meeting.
To make up the difference, AUHSD is once again tapping its reserve fund, something district leaders acknowledge is not sustainable.
AUHSD’s reserves are now well below the statewide average, where – despite a state minimum requirement of only 3% – district reserves have typically hovered closer to 15 to 20% of annual spending.
During the pandemic, most districts, including Acalanes, built unusually strong fund balances by banking federal relief and one-time state grants. Those extra dollars are disappearing while inflation erodes the value of local parcel taxes enacted well over a decade ago.
If nothing changes, the district will eventually have to cut into the very programs parcel taxes and community fundraising were designed to protect.
Help is unlikely to come from Sacramento. AUHSD’s own materials note that its Local Control Funding Formula (LCFF) allocation puts it among the lowest-funded high-school districts in the state, and nothing in the current formula is likely to change that. That’s because the state sends more money to districts with higher concentrations of high-need students.
It’s also why the district leans so heavily on local support.
Parcel taxes are estimated to bring in about $10.5 million in 2025–27, and parents clubs and education foundations add millions more, together covering roughly 14% of AUHSD’s costs.
So while the 2026–27 budget prioritizes student-facing services by mostly keeping class offerings and key student resources intact, AUHSD is continuing to spend more than it takes in, drawing down reserves to close the gap.
Inevitably, hard choices lie ahead.
At their first May meeting, the board finalized staffing reductions for 2026–27 as a prelude to adopting the budget. Salaries and benefits make up over 80% of district costs, so cuts have to hit people.
Reductions include advanced elective and special program teaching staff, library services, counseling, administrative positions, tech and maintenance operations, and funding for professional development and student enrichment.
These reductions will of course affect student support and elective choices.
Last year, the district proposed Measure T, a parcel tax designed to generate about $4.5 million a year and bring fiscal stability for eight years. It won 63.57% approval, but fell short of the 66.7% threshold.
Given AUHSD’s projections and recent board discussions, it is increasingly likely the district will try again in November.
What’s at stake if AUHSD is eventually forced into deeper cuts is illustrated by Orinda’s Miramonte High School. With per-pupil spending only around the statewide median, Miramonte’s graduation and college-going rates rank in the top few percent of public high schools statewide – and far above national norms.
AUHSD has built a system where the vast majority of students not only finish high school but move on to a wide range of selective colleges. Yet it is sustaining that performance by spending down reserves toward a self-imposed 10% floor and operating with funding that, even with generous local support, is only about middle-of-the-pack.
“We have a lot of really smart and talented and strategic staff that are doing their best … [but] this is not sustainable … everybody is doing their best to keep it away from student experience, [but] that is not going to be successful in the current reality,” board member Jennifer Chen said when the cuts were approved earlier this spring.
In other words, something’s got to give.
More than likely, it will be voters who decide what that is.
What a 10% reserve is – and isn’t
A 10% reserve is a thin cushon against cash-flow swings, unexpected state cuts or inflation-driven cost spikes. With annual spending around $108 million, a 10% reserve is roughly $10 to $11 million.
That’s far above the state’s 3% minimum for a district AUHSD’s size, but below what many districts actually hold: an analysis by the Legislative Analyst’s Office found average reserves of about 17% of annual spending, and recent snapshots suggest typical levels are in the low-20s for unified districts.
It’s also below what the Government Finance Officers Association recommends for general governments – the goal of about two months of operating revenues, roughly 16%, as a baseline “rainy day” fund.
Bottom line
A reserve fund gives a district margin for error. Once AUHSD’s reserve hits 10%, that margin is largely used up. The district is then down to five or six weeks of savings; if costs keep outpacing revenues, it can no longer quietly dip into savings and must either find new money or make visible cuts to the programs that produce outcomes like Miramonte’s