During a Feb. 10 PAUSD board meeting, the Palo Alto Board of Education unanimously opposed a plan to cut non-teacher staff positions in the 2026-27 term. The original plan was proposed by district staff as part of a “zero-based budget” strategy, aimed at addressing rising operational costs such as utilities and insurance. However, after pushback from the community and educators, the board determined these positions were essential to student success and voted 5-0 to maintain current staffing levels.

California School Employees Association Palo Alto chapter president Meb Steiner said that the reversal of this decision brought a sense of relief to the community. Even with the policy win, Palo Alto Educators Association president Tom Culbertson expressed discontent with the lack of transparency surrounding the proposed changes. According to Culbertson, there was no financial constraint that would warrant these cuts, especially since the school district has reserves of money that have been increasing over time.

“The school district has an ending fund balance,” he said. “They have cash on hand at the end of every month and at the end of every school year or fiscal year, and that number has been growing over time. There is no fiscal crisis that requires budget cutting in the common sense of the way people use the word.”

The aforementioned staff cuts and their resolution emerged amid ongoing labor negotiations. Since Sept. 2025, PAUSD has been discussing salary and benefit increase proposals with the Palo Alto teacher and non-teacher unions. According to the PAUSD website, PAEA put down a 28% raise proposal, including salary and benefits, while the Palo Alto chapter of the CSEA asked for an increase over two years, specifically with an 11% raise the first year and an 8% raise with medical benefits the second year, excluding the cost of stipends.

A PAEA negotiations update released on the PAUSD website refers to the proposed costs as “unprecedented and unsustainable,” as the PAEA and CSEA proposals total over $42.5 million and around $37.68 million, respectively. According to Steiner, the proposed cost is not unusually high when compared with past salary increases, which have ranged from 4% to 11%. She added that the 47.92% increase proposed by the district did not reflect the projected long-term costs over multiple years, rather than the immediate scope of CSEA’s proposal. In response, PAUSD suggested a 2% raise to non-teacher salary to CSEA and a 7.41% raise to teacher salary to PAEA.

“For the first time (the district) took those proposals and added in (the) cost over time, all the benefits, all the retirement (and) all of the statutory contributions that the district is required to make by law,” she said. “They lumped that all together and presented it as 48%.”

One of the major reasons teacher unions are adamant in their fight for higher wages lies in the cost of living in California.

“If you look at our salary increases over the last 20 years, (and) you added it all together, we’re barely keeping pace with inflation,” Culbertson said. “So (for) every educator who’s been in the district for 20 years or 10 years, their buying power has not increased in the last 10 or 20 years.”

Despite receiving the highest amount of salary as a step E non-teacher employee — where ‘E’ indicates a higher level seniority — Steiner states that affordability in the Bay Area has worsened. Pay disparities within CSEA mean that employees of lower seniority, and therefore lower salaries, face greater strain.

“(Employees are) from all over the place, and it’s hard enough for teachers to afford to live close by, but for (non-teacher staff) with lower wage jobs, it’s even more difficult,” she said.

Public Information Officer Lynette White, responding on behalf of then-Deputy Superintendent Trent Bahadursingh and Chief Business Officer Charen Yu, said increasing staff salary allocations could create financial pressure if new revenue sources — such as state funding or local revenue — do not increase accordingly.

“If the increase is supported by new revenue (for example, state or federal funding or local revenue), then it does not add to debt,” White wrote in an email. “However, if spending exceeds ongoing revenue and the district relies on ending fund balance to cover the difference, that can create financial strain.”

According to additional resources on the PAUSD website, the total cost of employing a staff member is comprised of their salary — which includes money for medical, dental and vision aid — and statutory benefits, such as pension, Medicare, unemployment insurance and worker compensation. Teachers are also given a stipend based on their educational level.

If the district were to agree with the increase, they would have a negative ending fund balance of $59 million by the end of the 2026-27 fiscal year and $395 million by the end of the 2029-30 fiscal year, according to the website under “Impact of Current Proposals.”

“A budget increase only impacts debt if it is not supported by sustainable revenue,” White added. “Responsible budgeting means aligning ongoing expenses with ongoing funding so we maintain financial stability over time.”

As of now, Steiner has emphasized that the staff unions aim to keep communicating with the district, and that continuing negotiations is a priority. A new budget for the 2026-27 school year is set to be presented at a future board meeting.

Note: This story has been updated with new data and its source.