From scarcity to opportunity: Reframing school finance

Across California, school district leaders find themselves navigating an unprecedented fiscal crossroads. Seventy-five percent of school districts in California are experiencing declining enrollment (PPIC, 2025). In addition, shifting state priorities and unpredictable federal commitments have produced a “new normal” in which the traditional playbook of managing through cuts is insufficient. The conventional wisdom of doing more with less has reached a breaking point. For many districts, the conversation has centered almost exclusively on reductions, including closing schools, cutting programs, and reducing staff. Yet, it’s essential to note that when districts generate new funds, they can offset equivalent reductions to programs and services.

This article reframes the fiscal narrative, shifting it away from scarcity and toward opportunity. Specifically, it examines how the Las Virgenes Unified School District has pivoted from a scarcity mindset to one rooted in revenue generation and brand identity, resulting in measurable fiscal stability and programmatic growth. Our story demonstrates that declining enrollment and budgetary strain can be addressed not solely with cuts, but with creative and sustainable funding streams that advance both student outcomes and organizational health.

The declining enrollment context California’s school districts are experiencing one of the most significant demographic declines in decades. Since 2014-15, statewide TK-12 enrollment has declined by approximately 420,000 students (PPIC, 2025), and the Department of Finance projects further losses of about 585,800 students over the next 10 years, through 2033-34, if current trends persist (DOF, 2025). Declining enrollment directly erodes Average Daily Attendance revenues — the lifeblood of district budgets. For every 100 students lost, a unified district forfeits approximately $1.5 million annually in ADA funding.

This decline has led most districts to adopt a mindset of cuts. We are programmed to reduce sections, lay off staff, close campuses, and restructure central services. While such measures may be unavoidable in some contexts, they often exacerbate community mistrust, diminish community support, and diminish long-term sustainability. Closing a school may seem like a fiscal decision, but the community affected by the closure will suffer a lasting and profound injury.

We have chosen a different path in LVUSD. Recognizing that cuts alone would not address the structural challenge, and understanding that we are in a competitive environment for enrollment with private schools and neighboring public schools, we reframed the narrative around revenue generation. The guiding principle was simple: “A dollar raised avoids a dollar cut.”

Building the foundation: Brand identity and vision Revenue generation requires more than balance-sheet creativity. It begins with clarity of identity. In LVUSD, this meant eliminating stale logos, retiring dated messaging, and articulating an inclusive, future-focused vision. We have recognized that branding is more than cosmetic; it is strategic. Community confidence and brand clarity are prerequisite conditions for enrollment stabilization. Our logo had not been updated since 1989, and it showed. We spent $100,000, went through an extensive process with our staff and community, and the reviews have been very strong.

LVUSD invested in a unified identity campaign, centering its vision on inclusivity, innovation, and excellence. This outward-facing clarity produced tangible results: While most Los Angeles County districts reported enrollment losses, LVUSD was one of only three districts in the county to post net enrollment growth in 2024–25. Families were drawn not only to academic programs but also to a visible sense of organizational coherence.

Alternative funding sources: Creativity in action California’s public school system is confronting unprecedented demographic and fiscal pressures, with declining enrollment projected to continue over the next decade. Because district revenue in California is largely determined by Average Daily Attendance, these declines translate directly into structural deficits that no amount of “traditional” belt-tightening can erase. Declining enrollment is structural, not cyclical, and requires a fundamental rethinking of how districts generate and sustain revenue.

LVUSD’s experience demonstrates creativity and innovation. Through reframing fiscal challenges as opportunities, the district has designed a suite of strategies that both offset structural losses and deepen alignment to its instructional mission. These strategies illustrate four thematic opportunities available to districts across the state.

1. Reimagining afterschool as both equity and enterprise Average Daily Attendance is the lifeblood of California school finance. Each percentage point recovered can yield hundreds of thousands of dollars in unrestricted General Fund revenue. Recognizing this, LVUSD aligned attendance recovery with Expanded Learning Opportunities Program (ELOP) funds to reimagine after-school enrichment.

Historically, the district outsourced programs to external providers. While convenient, this model forfeited opportunities for synergy with instructional goals and revenue retention. LVUSD instead launched LVUSD Plus+ (Play and Learn with US), a district-operated enrichment initiative designed to:

This hybrid model generates a projected $1 million annual net positive to the General Fund, achieved through the combination of ELOP offsets and tuition revenue. It also sets the foundation for layering attendance recovery into the model. The equity impact is equally important: Students most in need have access to no-cost enrichment and academic support, while tuition-based families benefit from high-quality, district-operated programming.

Our takeaway is that it is not enough to simply run an after-school program. Districts must reimagine, redesign, and innovate to maximize both fiscal and instructional impact. We need to seek out areas where we can transform compliance-driven requirements into opportunity-rich solutions. Every program, no matter how familiar, holds untapped potential if approached with creativity and purpose. In an era where every dollar and every student counts, we believe in leaving no stone unturned and never settling for implementation when innovation is possible.

2. Building talent pipelines through credentialing Teacher shortages have reached crisis levels across California. Between 2010 and 2020, the number of teacher preparation program completers fell by more than 30 percent, and more than one in five new hires statewide entered classrooms without full credentials (California Commission on Teacher Credentialing, 2023). LVUSD recognized early that reliance on external pipelines would only exacerbate future costs. The district pursued accreditation from the California Commission on Teacher Credentialing to deliver its own educator preparation and leadership programs. Today, LVUSD operates four accredited programs.

These programs now serve candidates from over 50 districts across Southern California. The fiscal benefits are substantial: the programs generate more than $1 million annually in net revenue and expenditure offsets. But the deeper impact lies in human capital. By developing our own “bench” of teacher and administrator leaders, LVUSD has insulated itself from costly recruitment and turnover and provided a pool of talent for our entire region/state. LVUSD’s credentialing programs show how investments in people can simultaneously advance fiscal stability and educational excellence.

3. Challenging legacy systems through insurance reform Many fiscal inefficiencies persist not because they are necessary, but because they are familiar. Insurance Joint Powers Authorities (JPAs) often exemplify this inertia. For years, LVUSD had simply renewed its longstanding Health/Welfare and Workers’ Compensation agreements without a critical review.

We initiated a comprehensive benchmarking process, comparing deductibles, coverage, and pricing models across multiple JPAs. The result: a transition to deductible-based structures and alternative providers that yielded over $1 million in annual savings — without cutting employee benefits or protections. Structural inefficiencies, once normalized, compound over decades. LVUSD’s JPA overhaul underscores the importance of routinely scrutinizing legacy systems. What appears fixed often hides significant untapped savings — dollars that can be redirected to classrooms.

4. Maximizing facilities through strategic bond investment LVUSD’s facilities story is not one of underutilization, but of urgency and disciplined planning. With more than $340 million in voter-approved bonds dedicated to capital repair and improvement, the district faces the dual challenge of addressing decades of deferred maintenance while navigating inflation, tariffs, and supply chain volatility. In this environment, every dollar must be stretched through careful sequencing and execution.

To maximize value, LVUSD developed a strategic implementation plan that aligns projects with funding availability. Before the bond even passed, the district had already submitted Series A projects to the Division of the State Architect, ensuring construction could begin immediately upon approval. The same proactive approach now guides Series B submissions, enabling work to progress without costly delays.

Our results are easily measurable. Within just three years of bond passage, approximately $120 million in projects are either completed or in progress. This accelerated timeline ensures that schools receive needed repairs and modernization while protecting taxpayers from escalating costs. Construction delays in high-inflation environments erode both purchasing power and public trust. Inaction compounds costs; action preserves them. For LVUSD, facilities management is about leveraging timing, planning, and execution to transform finite dollars into long-term value for students, staff, and the community.

Lessons learned and broader implications The central takeaway is unmistakable: Creativity has become the new fiscal discipline. LVUSD’s four pathways are not isolated strategies but expressions of broader principles that every California district can apply:

Cuts alone will not stabilize budgets. Enrollment decline is a structural reality, not a temporary downturn. Revenue generation must complement expenditure control if districts are to achieve long-term stability.

Revenue must serve the mission. Initiatives tied directly to instructional priorities, such as credentialing programs or enrichment models, produce durable returns that strengthen both the balance sheet and student outcomes.

Identity drives investment. Families, partners, and staff are more likely to choose and support districts that project coherence, confidence, and inclusivity. Brand clarity is not cosmetic; it is fiscal.

Tradition is not destiny. Legacy systems, from JPAs to facilities planning, must be scrutinized. What feels permanent often conceals opportunities for reinvention and savings.

In short, the fiscal conversation in education must be reframed. Revenue generation is not an ancillary task; it is a core discipline of modern leadership. Districts that thrive in an era of enrollment decline will be those that see challenge as an invitation: to align revenue with mission, to rethink legacy systems, and to innovate rather than retrench. Cuts may balance budgets in the short term, but only creativity will sustain opportunity for the long term. The call is clear: The future belongs to the districts bold enough to imagine it.

References California Commission on Teacher Credentialing. Teacher Supply in California, 2023-24: A Report to the Legislature. April 2025. https://docs.ctc.ca.gov/Document/Download/30049 CTC

California Department of Finance (DOF). (2024). Public K-12 Graded Enrollment and High School Graduate Projections by County, 2024 Series.

Public Policy Institute of California (PPIC). (2025). Unpacking California’s Continued School Enrollment Decline. US Tariff Impact on Facility Management Market. Markets and Markets Research Insight, April 2025.

Dan Stepenosky, Ed.D., is superintendent of Las Virgenes USD and Ryan Gleason, Ed.D., is chief business officer for Las Virgenes USD.