Pasadena Unified School District Faces Urgent Financial Crisis

The Pasadena Unified School District (PUSD) is confronting a serious financial crisis, with warnings from the Los Angeles County Office of Education (LACOE) indicating that immediate action is crucial to avoid county intervention or receivership. During a presentation on October 9, 2025, LACOE officials highlighted the district’s precarious financial situation, which could result in a budget shortfall estimated between $30 million and $35 million for the 2026-2027 fiscal year.

LACOE’s Director of Business Advisory Services, Octavio Castelo, outlined the factors contributing to the district’s financial troubles, including a structural deficit, rising operational costs, declining enrollment, and uncertain federal funding. He emphasized that without proactive measures, the district could find itself in a dire situation, potentially requiring a county fiscal expert, advisor, or even a county administrator to oversee operations.

In his remarks, LACOE Chief Financial Officer David Hart stressed the urgency of the matter. “I would not be here if we weren’t trying to convey that the clock is ticking,” Hart stated. He acknowledged the unique challenges faced by Pasadena but warned that attempting to generate revenue alone would not resolve the financial issues.

To address this crisis, PUSD has announced a multi-year fiscal stabilization plan aimed at cutting approximately $83 million over three years. This plan includes implementing reductions of $30 million to $35 million in the upcoming school year. The PUSD Board of Education passed this stabilization plan over the summer at LACOE’s request, which marks a significant step towards addressing its financial instability.

Complicating the situation, the district has been without a chief business officer since mid-September, when Saman Bravo-Karimi accepted a position with the Los Angeles Unified School District. In the interim, Superintendent Elizabeth Blanco and other senior staff are covering the responsibilities of this critical role, raising concerns about the district’s financial oversight.

Castelo expressed his apprehension regarding this leadership gap, as the absence of key financial personnel can exacerbate existing challenges. He noted that when a district faces financial difficulties, it is crucial to have strong leadership in budget and fiscal services.

The potential for county oversight has historical precedence; the Inglewood Unified School District, for example, has been under receivership for over a decade, stripping its elected board of authority. Castelo pointed out, “The authority lies with the county administrator.” This model serves as a cautionary tale for PUSD as it navigates its fiscal landscape.

In the coming months, the Superintendent’s Budget Advisory Committee will identify specific areas where reductions can be made. The Board of Education is scheduled to review these recommendations in November, with the goal of implementing cuts starting in December. Notices of reduction will be issued in March, and a final budget for the next fiscal year is expected to be approved by July.

A critical date in this process is December 15, when PUSD must submit its first interim report to LACOE, capturing the district’s financial position up to October 31. LACOE will review this report and the district’s self-assessment to determine the next steps. Castelo remarked on the importance of this report, stating, “That’s going to drive a lot of your decisions come March.”

Last year, the district faced significant challenges, including the aftermath of the Eaton fire. The Board of Education approved cuts to approximately 150 full-time positions, a move that sparked community protests and backlash. The final number of expected reductions ended up being lower due to state law and collective bargaining processes.

PUSD Trustee Scott Harden emphasized the need for long-term planning and structural redesign to ensure sustainability in light of the district’s financial realities. “We can do this and we can have what we want, and I actually believe we can thrive,” he stated. “But we know there are systemic challenges, and we also know that the environment that we’re in, both at the local level and at the broader state and national level, is going to require that we rethink how we serve our students.”

The urgency of PUSD’s financial situation has prompted local leaders to take immediate action. Only time will tell if these efforts will stabilize the district and secure its future.