Where PUSD’s Money Comes From, Where It Goes, and How a Soil Cleanup Turned Into a Tree War

If you live in Pasadena, Altadena, or Sierra Madre and pay property taxes, a slice of your bill funds the Pasadena Unified School District. But “funds” is doing a lot of work in that sentence, because PUSD’s finances are in genuine trouble, and the district’s response to Eaton Fire contamination has now collided with the city of Pasadena, angry parents, environmental groups, and — as of this summer — a lawsuit that pulls in the state itself. Here’s the full picture: the money, the enrollment numbers behind it, the salaries, and the mess in the trees.

How PUSD Actually Gets Paid

A persistent myth about California school funding is that districts simply keep whatever property taxes get collected locally. They don’t, not directly. Since the passage of the Local Control Funding Formula (LCFF), the state calculates a target funding level per district based on enrollment, grade span, and the number of low-income students, English learners, and foster youth (the “unduplicated pupil percentage”). Local property tax revenue is counted first and credited against that target, and the state fills in the rest with general fund dollars. So property taxes are the foundation of the funding stack, but the total check PUSD receives is really an LCFF number set in Sacramento, adjusted every year by the state budget.

That LCFF revenue is currently PUSD’s single largest income source. For 2026-27, the district’s estimated LCFF revenue rose from about $191.6 million at the Second Interim budget report to roughly $194.4 million after the Governor’s May Revision — a bump of about $2.8 million, driven mostly by the statutory cost-of-living adjustment plus a small additional funding increase tied to a proposed state paid-family-leave mandate. On top of LCFF, the district collects federal Title I and special education dollars, state categorical grants, and local revenue including parcel taxes, facility rentals, and interest income.

That local piece matters more than people realize. In November 2024, Pasadena-area voters approved Measure EE, a local parcel tax assessed at $90 per parcel per year for eight years, expected to raise roughly $5 million annually — money that, unlike bond funds, can legally be spent on general operations, including salaries. District officials credit Measure EE with shrinking what would have been a much larger structural deficit, cutting PUSD’s projected three-year shortfall from roughly $47 million down to about $37 million. Real money, but nowhere near enough to close the gap on its own — Measure EE covers a modest fraction of the district’s total operating hole.

Voters have also said yes to PUSD bond measures four times since 1997, authorizing more than $2 billion for facilities: Measure Y ($240 million, 1997), Measure TT ($350 million, 2008), Measure O ($516.3 million, 2020), and Measure R ($900 million, approved alongside Measure EE in November 2024). It’s worth being clear about what these bonds can and cannot do. California law restricts general obligation bond proceeds to capital expenditures — construction, renovation, and equipment — held in a separate, independently audited account. They cannot legally be spent on teacher salaries, day-to-day operating costs, or closing a general fund deficit. That distinction matters enormously to the budget story below: PUSD can be sitting on hundreds of millions in bond authority for new gyms, pools, and modernized restrooms at the same time its operating budget is hemorrhaging tens of millions of dollars a year, because the two pots of money are legally walled off from each other.

Fewer Students, Less Revenue: The Enrollment Story Behind the Budget

Because LCFF funding follows students through average daily attendance, PUSD’s revenue problem is inseparable from its enrollment problem, and the enrollment numbers are stark. According to California Department of Education Census Day Enrollment data, PUSD has lost students every single year for a decade, through changes in superintendents, through the pandemic, and now through the aftermath of the Eaton Fire.

The district’s total enrollment fell from 18,492 students in 2015-16 to 14,158 in 2025-26 — a drop of roughly 4,334 students, or about 23% over ten years, averaging out to roughly 433 students lost per year. The single largest one-year drop came in 2025-26 itself, when enrollment fell by 851 students, a decline district officials and outside consultants attribute in part to families displaced by the Eaton Fire. A demographic consultant’s report presented to the district this summer found the decline concentrated most heavily at the elementary level, where enrollment has fallen by roughly half since the late 1990s, and in kindergarten specifically, which is down more than half since the mid-1990s. High schools have been comparatively insulated so far, though the same report projects that decline eventually reaching the upper grades too.

The same report found that 35% of school-age children living within PUSD boundaries now attend private school, versus 57% in PUSD and other public schools and about 8% in charter schools — and that recently built housing in the district’s footprint has produced very few new students, with roughly 2,852 housing units built since 2015 yielding only about 129 PUSD students, or roughly one student for every 30 new units. In plain terms: even as Pasadena and Altadena add housing, that housing is not translating into new enrollment the way older, family-oriented housing stock once did.

Every student lost is state funding the district never recovers, and it compounds year over year rather than resetting. That’s the structural engine underneath PUSD’s current fiscal crisis — a school system with facilities, staffing, and administrative infrastructure built for roughly 18,000 students now serving around 14,000, without having shrunk its cost base at anywhere close to the same pace.

The Spending Side: A District Bigger Than Its Enrollment

PUSD’s general fund for the current planning cycle runs in the neighborhood of $189 million, and the district has been explicit that it built a budget sized for a student population it no longer has. Average daily attendance is projected to fall to around 11,975 students in 2026-27, down from an estimated 12,329 the year before, continuing the enrollment slide described above.

Salaries and benefits are by far the biggest expenditure category in the general fund, and three consecutive years of negotiated raises added an estimated $50 million in ongoing salary costs district-wide without a matching increase in ongoing revenue. That mismatch is widely cited as the single biggest driver of the current crisis: raises negotiated during a period of flush COVID-relief funding became permanent, ongoing obligations after that one-time federal money expired. Health and welfare benefit costs compound the pressure, with premium increases projected at roughly 9% in 2026-27 and around 7% annually for the two years after that, since the district absorbs the full cost increase rather than passing any of it to employees.

Special education has become its own budget-buster, and the growth here is dramatic even by PUSD’s standards.

Total special education expenditures now run about $87.9 million a year, up sharply from $35.8 million just a few years earlier in 2022-23 — more than doubling in a short span. The unrestricted general fund now covers roughly 60% of that special-education cost, because dedicated state and federal special-ed revenue hasn’t kept pace with the district’s obligations. Contracted special-education services alone have jumped 28% (about $8.8 million) in two years, to roughly $40.8 million, largely because the district is legally required to provide these mandated services regardless of what outside contractors charge, and the district has historically not pushed back hard on rising contractor costs.

Put it together and PUSD has been running structural deficits for several years. An operating shortfall of roughly $36 million was projected for 2025-26 alone. More recent district reporting to the Los Angeles County Office of Education (LACOE) — which has direct fiscal oversight authority over the district — lays out a three-year Multi-Year Projection with deficits building year over year.

As reported in board materials this fall, the district projected a $7.8 million deficit for 2025-26, growing to $37 million in 2026-27, for a three-year cumulative shortfall of about $74.1 million. LACOE required PUSD to identify $30-35 million in reductions specifically for the 2026-27 budget, with the school board voting on which cuts to implement in November 2025, a first interim financial report due to the county by December 15, 2025, and any resulting layoff notices required by state law to go out by March 15, 2026. The county can certify a district’s financial condition as positive, qualified, or negative — the latter meaning the district cannot meet its obligations — and PUSD’s own multi-year projections have flagged the real possibility of reserves falling below the state-mandated minimum threshold if reductions aren’t implemented.

The district’s Superintendent’s Budget Advisory Committee (SBAC), made up of parents, students, educators, and community members, has been meeting publicly through the fall to weigh options, with proposed reductions touching career technical education positions, athletics budgets, community assistant roles, central office staffing, and school-based services more broadly. Parents and students who’ve spoken at board meetings have pushed back hard on cuts to arts, libraries, and athletics programs, arguing the burden of fixing years of accumulated deficit is falling disproportionately on the programs families value most.

What the Superintendent and Staff Actually Make

Dr. Elizabeth J. Blanco became PUSD’s permanent superintendent in mid-2024 after serving as interim superintendent and, before that, deputy superintendent — the district’s second-highest post — since 2022. She has spent nine years with PUSD and more than 30 years in public education overall, including prior roles as Chief Academic Officer, Chief of Specialized Instructional Services, and Executive Director of the district’s Special Education Local Plan Area, plus five years as Chief of Special Education Services in San Francisco Unified. Her board-approved contract set a base salary of $346,782, running from July 2024 through June 2027, notably higher than the $265,000 base her predecessor, Brian McDonald, was paid before he resigned in June 2023. Blanco’s contract also includes a $500,000 life insurance policy, a $400 monthly car allowance, reimbursement for up to twelve nights of lodging a year, and payment of dues for professional memberships in at least two organizations. For comparison, McDonald’s total reported pay and benefits in a recent year topped $270,000, and Blanco’s own compensation as interim superintendent in 2023 was reported at roughly $304,000 in total pay and benefits combined.

Beyond the superintendent’s office, PUSD employs several assistant superintendents — currently including roles overseeing academics, specialized services, and business operations — along with an interim business administrator. As is typical for a district this size, a meaningful share of staff earn six figures once salary and benefits are combined, a pattern visible in public salary databases that track California school employee compensation. That broader compensation trend is exactly why the district’s recent raises loom so large in the budget conversation: negotiated increases affect not just administrators but the entire unionized teaching and classified workforce, which is why the roughly $50 million in added ongoing salary costs hit the general fund all at once rather than gradually, and why it remains the most frequently cited structural driver of the current deficit — even as district officials have, in recent public messaging, tended to emphasize declining enrollment and expiring federal relief funds over the compensation increases themselves.

The Eaton Fire’s Second Wave: Soil Contamination

The January 2025 Eaton Fire displaced more than 10,000 PUSD students and destroyed or damaged nearly 1,000 family homes, according to the district’s own accounting, and it triggered a massive initial cleanup — the Army Corps of Engineers alone removed burned structural debris using wet-cutting methods to limit airborne contaminants, while district crews hauled more than 161 tons of debris off campuses in the weeks after the fire.

But the bigger, slower-moving problem surfaced months later. In April 2025, the Los Angeles County Department of Public Health released findings of elevated lead levels in soil samples taken near the Eaton Fire burn scar, prompting PUSD to launch its own soil testing across every campus in coordination with county and Pasadena public health officials. The testing followed the same protocol the county used for residential parcel sampling — surface soil sampling in bare-dirt areas like gardens, athletic fields, and play spaces — and screened for lead along with arsenic, cadmium, chromium, copper, nickel, and zinc. Notably, officials determined that areas covered by grass, artificial turf, mulch, or gravel were considered safe; the primary concern was limited to exposed bare soil, which is a relatively small share of total campus acreage but concentrated in gardens and play areas kids actually use.

By May 2025, PUSD reported that several campuses had come back clean and reopened fully, but roughly a dozen campuses showed elevated levels of one or more of these substances in specific outdoor areas. The California Department of Toxic Substances Control (DTSC) reviewed the district’s Fire-Related Campus Assessment Reports and ultimately ordered soil removed and replaced at eleven district-owned properties: Franklin Elementary, San Rafael Elementary, Longfellow Elementary, Blair High School, the former Cleveland Elementary site, Field Elementary, John Muir High School, Octavia E. Butler Magnet, Washington Elementary, Jefferson Children’s and Teen’s Center, and the PUSD Education Center. DTSC characterized the contamination as an “imminent and substantial threat” to students, staff, and other campus users — language that gave the district legal cover to move fast, including through the summer break when campuses were empty.

Fire-related expenditures are not free money for the district, either. The presentation to the board this year noted that fire-related work in the general fund is expected to increase PUSD’s required Routine Restricted Maintenance contribution — a state-mandated set-aside for facilities upkeep — by roughly $6.9 million a year in 2025-26 and beyond, adding yet another ongoing cost pressure to a budget that is already underwater.

Then Came the Trees — and the Fight With the City

Removing contaminated soil around root systems often means removing the trees themselves, and that’s where the story turned into a genuine civic fight. PUSD’s remediation plan called for felling trees within the contamination zones at these eleven sites — the district says nearly 200 trees were affected, with one report specifically referencing a recommendation to remove 193 trees — and it initially argued the work qualified as “environmental remediation” rather than ordinary landscaping under Pasadena’s Tree Protection Ordinance, meaning the district wasn’t legally obligated to replant on a one-to-one basis. PUSD said this classification came after direct discussion with the city, and officials acknowledged publicly how difficult the decision was, noting the district maintains more than 5,000 trees across its properties and that no removal was made lightly, since trees are where children play, where communities gather, and where roots — literal and figurative — run deep.

The city of Pasadena saw it differently. City officials say PUSD proceeded with tree removals over the city’s objections and the objections of community members, and that the district relied on its own interpretation of remediation authority despite Pasadena’s insistence that its tree ordinance still applied. The city has said it will continue enforcing local tree-protection rules and is reserving the right to pursue legal claims. In response, PUSD released a detailed public timeline in the summer of 2026 defending the process, arguing months of coordination preceded the removals and that the city had initially agreed the ordinance didn’t apply to hazardous-materials cleanup before reversing that position later on. According to the district’s account, DTSC itself concurred that the contaminated soil posed an imminent and substantial threat and that affected infrastructure, trees, and vegetation would need to be removed and replaced as part of the cleanup — putting a state agency’s determination at the center of the district’s legal justification.

The dispute escalated well beyond a disagreement between two government bodies. A group calling itself Friends of PUSD Trees filed a lawsuit against both PUSD and DTSC, alleging the agencies failed to comply with the city’s Tree Protection Ordinance and other environmental review requirements before authorizing widespread removals — pulling a state agency directly into litigation alongside the school district. On the ground, the fight has been personal and visible: one parent’s teenage daughter reportedly spent eight hours sitting in a protected oak tree to block a scheduled removal, and community activists have publicly challenged the accuracy of the report recommending removal of 193 trees, arguing the underlying numbers don’t add up. Despite the pending litigation and what many residents believed was a temporary pause in the work, tree removals reportedly continued at some campuses through the summer of 2026, deepening community frustration and, according to local reporting, prompting continued defiance from residents at removal sites.

As of this writing, remediation work continues campus by campus, in parallel with the legal fight. At Octavia Butler Magnet, crews have been hauling contaminated soil offsite; at Washington Elementary, the district has cleared to backfill with clean soil and is coordinating with the Audubon Society and a landscape architect on restoring a native garden; Franklin Elementary is moving toward backfilling excavated areas with clean soil; and San Rafael Elementary is still waiting on sampling clearance before its next phase can begin. The district filed formal environmental notices for the soil removal and replacement work with the state clearinghouse in early March 2026, while the city separately pursued its own, unrelated tree-removal permits in areas like the Lower Arroyo Seco — a reminder that Pasadena’s relationship with its urban tree canopy is a live policy issue on multiple fronts, not just the one involving the school district.

The Bigger Picture

Step back, and the through-line is a district trying to do several very expensive things at once with a shrinking revenue base: close a structural budget deficit built on a decade of enrollment decline and several years of unsustainable raises, execute a state-mandated environmental cleanup that nobody budgeted for, and now defend that cleanup in court against its own city and a coalition of residents. None of these pressures are new exactly — the enrollment decline has been visible in public data since at least 2015, and the special-education cost growth has been building for several budget cycles — but they are now converging in the same fiscal year, at the same time the district is trying to close tens of millions of dollars in ongoing shortfalls.

For Pasadena-area taxpayers, the practical takeaway is this: your property tax dollars are the base layer of a much larger, state-controlled funding formula, and that formula is shrinking as the district loses students it is unlikely to get back through new housing alone. The district’s total spending has outpaced what its enrollment alone would justify for years, senior leadership compensation has increased notably even as rank-and-file layoffs proceed, and a fire that happened largely off-campus has turned into an on-campus legal fight over soil, trees, and who ultimately gets to decide what “emergency” authority means when a school district, a city, and a state agency all claim jurisdiction over the same ground. Expect more headlines — and more scrutiny from the county, the state, and the city — before any of this is fully resolved.