District loses $1.8 million, and expects more cuts to come.
By Michelle Logsdon/Special to The Malibu Times
In a scene eerily reminiscent of late last year, the Santa Monica-Malibu Unified School District (SMMUSD) is bracing for yet another drop in state funding, as well as anticipating possibly more bad news in January when Gov. Arnold Schwarzenegger will complete the proposed state budget.
A significant reduction in state funding has left the district scrambling to meet its required general fund reserve monies. That could mean more cuts, according to Superintendent John Deasy, but he hopes that is not the case.
The difficult news was announced by SMMUSD Chief Financial Officer Ken Bailey at the Dec. 4 Board of Education meeting. While presenting an interim budget report, Bailey explained that the state had cut the district’s revenue limit by 3 percent. That reduction translates into a loss of approximately $1.8 million this year.
The state requires SMMUSD to hold 1.5 percent of its expenditure budget, $1,555,000, in a reserve fund for economic uncertainty. Right now that fund is short $537,000. “That does not meet the standards,” Bailey said. “That puts us in jeopardy of being sanctioned by the county.”
In January, county officials will sit down with district officials and discuss where cuts can be made. The meeting could be short since the district already has a lengthy list of cuts prepared from last year.
At that time, the district faced a deficit of $13 million when the state slashed educational spending in order to deal with a lagging economy resulting from financial upheavals across the country following the Sept. 11 terrorist attacks. District officials were looking ahead to this year’s budget and working to solve financial problems proactively when they came up with the $13 million figure.
SMMUSD turned to the taxpayers for help. Proposition EE, a $300 parcel tax, was placed on the November 2002 ballot, but the measure failed. Salaries were frozen and $6.3 million was slashed from the employee directory including teachers and classified workers. Millions more in cuts were made in programming and operations.
The district approached the voters again this spring with Measure S – a $225 parcel tax that allowed for a senior exemption. This time residents passed the measure giving the district $6.5 million. Employees were added back. Then the cities of Santa Monica and Malibu upped their annual contributions to the school district to total $2,250,000. That money was used to add
back nurses, library personnel, instructional aides, a textbook coordinator and 13 employees to restore the elementary physical education program.
Last year’s losses were exacerbated by the nation’s skyrocketing insurance costs. The same is true this year. Bailey explained that the district is paying 17 percent more in health and welfare benefits than it paid last year.
Because these problems are statewide, government officials have given some leeway to educational institutions. Bailey said SMMUSD’s reserve requirement was dropped from 3 percent to 1.5 percent last year. Plus, the public school construction program normally has to spend 3 percent of its budget on maintenance but that number has been lowered to 2 percent. “We’ve used every flexibility item offered to us,” Bailey said.
Now, it’s a waiting game. The district is waiting for the governor’s proposed budget and is hoping it is on time. “It would be helpful to know as early as possible so we
can make the financial changes necessary,” Bailey said.
Although Schwarzenegger ran on a platform of supporting education, Bailey doesn’t blame him for cutting funding. “I think it was difficult for Arnold to know the complexity of the finances. I just hope he brings consensus to the legislative process so there is no delay in the budget like last year.”
Bailey also said he would like to see a state process that deals with the budget in a multiyear plan so local entities do not have to face these issues year after year.