Santa Clara Unified School District has put its final contract offers on the table after a year of negotiations with its labor unions, proposing a 1.5% salary increase and nearly $21,000 in medical benefit contributions per employee. The offer, retroactive to July 1, 2025, comes as the district warns of a looming multimillion-dollar deficit and as workers say the raise won't keep pace with the cost of living in Santa Clara.
Matching Offers to Teachers and Classified Staff
Superintendent Damon Wright said in an Oct. 29 video that the district matched its offer to the California School Employees Association, which represents workers such as bus drivers and custodians, with its offer to United Teachers of Santa Clara, according to The Silicon Valley Voice. UTSC has already agreed to the district's offer on medical premiums, Wright said, while CSEA is still reviewing the district's newest proposal. SCUSD's contracts with both unions expired July 1, 2025, which is why any eventual salary increases would be applied retroactively once the unions sign off.
Both the salary bump and the medical contributions are contingent on union approval — without an agreement, neither takes effect. The district's certificated employees are represented by UTSC and the California Teachers Association, while classified staff fall under CSEA Chapter 350, per the district's own account on its website. Wright, in the same video, stressed caution around any new spending commitment, saying a salary increase creates an ongoing obligation the district must sustain year after year and that every additional financial commitment must be carefully considered, the outlet reported.
Union Says District Can Afford More
CSEA President Stephanie Alepin has pushed back hard on the district's math, arguing SCUSD has enough in its reserves to meet the union's proposed 5% salary increase instead of the 1.5% on offer. Alepin told the school board last month that a 1.5% increase amounts to a raise of just 40 cents an hour, and she has argued that figure falls well short of what CSEA members need to keep up with Santa Clara's rising cost of living.
That argument has a face attached to it. Gennie Hansen, a paraeducator with three years at SCUSD, told trustees on Oct. 22 that the 1.5% proposal would raise her monthly earnings by about $46. She said she had just 28 cents left in her bank account after paying bills that month, that she sometimes goes without eating when her son is staying at his father's house, and that she has gone years without dental care. Hansen described a 1.5% raise measured against 3.4% inflation as effectively a pay cut — a figure that lines up with Bureau of Labor Statistics data showing compensation costs for private-industry workers in the San Jose-San Francisco-Oakland combined statistical area rose 3.4% for the year ending in September 2026, according to the U.S. Bureau of Labor Statistics.
A District Already Squeezed by Layoffs and Deficits
The negotiations are unfolding against a backdrop of financial strain the district has been navigating for months. SCUSD laid off more than 100 employees in spring 2026, a move that saved $22 million but didn't stop the district from continuing to run multimillion-dollar deficits, the same outlet's report notes. The district had earlier projected a $13 million deficit for the fiscal year that began in July 2026, a shortfall that officials warned could grow as contract talks with labor unions progressed, as reported in a separate article from the same outlet.
If both unions accept the current offers and no other spending changes occur, SCUSD projects it will face a $32.6 million deficit by the end of June, leaving its rainy day fund at $98 million, per the district's own figures cited in the report. Santa Clara Unified has said on its website that expenses have outpaced revenues for years, creating what it calls a structural financial imbalance, compounded by declining student enrollment. More than 90% of the district's annual revenues go toward staff salaries and benefits, compared with a typical 80% to 85% at most school districts, the district says. It also describes its reserve as healthy but not something it can rely on year after year to cover ongoing costs — language that echoes the district's broader rightsizing explanations.
How This Compares to Past Contracts
The current offer is a steep step down from recent history. A prior UTSC agreement increased certificated salary schedules by 3.75% effective July 1, 2024. The district's new medical offer is nearly $21,000.
Elsewhere in the Bay Area, similar fights over classified staff contracts have been playing out. In Pleasanton, the school board was slated to vote on a tentative agreement with CSEA Chapter 155 that addressed work-year calendars, overtime distribution and vacation accrual, according to the Pleasanton Weekly. That deal would suspend a professional-growth compensation program for one year, with reinstatement set for July 2027, and includes a so-called me-too clause that would extend any larger raise negotiated by the Association of Pleasanton Teachers to classified workers as well.
What Happens Next
Board policy bars trustees from leaking information about ongoing negotiations, leaving CSEA's decision on the district's latest offer as the next major unknown in a process that has already stretched more than a year.
