The district could be in the red by 2013 if state tax extensions do not pass this summer.
By Knowles Adkisson / The Malibu Times
The Santa Monica-Malibu Unified School District (SMMUSD) could face a deficit of more than $4 million in its general fund by the end of the 2012-13 school year if state tax extensions requested by Gov. Jerry Brown do not pass this summer.
District CFO Jan Maez told the SMMUSD Board of Education at its Feb. 3 regular meeting in Malibu that failure of the tax extensions would result in lost revenue to the district of at least $3.6 million per year, with the figure rising to nearly $7 million per year depending on state budget cuts.
The governor’s current budget, Maez said, assumes that the state Legislature will approve five-year extensions to income, sales and vehicle taxes totaling about $12 billion. A special election in June would then ask voters to pass the extensions. Both assumptions are viewed as far from certain.
Maez presented the board with three budget scenarios ranging from most to least optimistic. Even if the tax extensions pass, Maez said the district would still need to transfer about $2.7 million from its general fund to balance the 2011-12 budget because the district currently spends more than it takes in. The general fund consists of undesignated reserve funds and currently totals about $15.7 million.
But if the tax extensions fail, Brown is threatening cuts of $9 billion. Maez projected the district would be looking at an immediate loss of $3.6 million per year. That number could rise to almost $7 million per year in a worst-case scenario, because the tax extensions would also reduce critical funding to other state services. Since education takes up more than half of the state’s budget, Maez said it would be difficult for state legislators to overlook education when making cuts.
The $15.7 million currently in the district’s general fund could absorb the loss of the state tax revenue for the 2011-12 school year. But coupled with rising costs, the district’s lost tax revenue would place its general fund $4.2 million in the red by 2013 in Maez’s worst-case scenario. That deficit balloons to $14.4 million in 2014 if expenditures remain at their current level.
Board member Ben Allen told The Malibu Times, “The governor’s threatening major cuts to K-12 [education] if this measure doesn’t get passed this summer, and that could be a major game-changer for us. And that would certainly affect everything from staffing to programs, etc.”
Staffing projections for 2011-12 must be submitted by March 15. Assistant Superintendent Debra Moore Washington said that with all the uncertainty surrounding the state budget, projections would probably change four or five times between then and June 30, when the district is required to adopt its budget.
Maez predicted that the state budget would most likely not be in place by June 30. With the state budget up in the air, Superintendent Tim Cuneo said district staff would have to make its best possible guess at the amount of revenue it will receive from the state. Once the state budget is adopted, the district has 45 days to make adjustments to its budget.