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Budget unknowns put school district planners in sticky spot

01.12.2012 | Sacramento Bee | Kevin Yamamura

Gov. Jerry Brown wants school districts to budget optimistically this year, assuming voters fearful of deep education cuts will approve higher taxes in November.

The
Democratic governor says he will work with school officials to figure
out ways to impose cuts in January 2013 if the taxes fail. That approach
could save teacher jobs if the governor discourages districts from
sending pink slips this spring.

But districts, knowing they would
bear the financial risk if they overspend in the fall, are loath to
assume the taxes will pass.


The state’s top fiscal analyst sympathized with the districts
Wednesday in his review of Brown’s budget, telling lawmakers they need
to determine their worst-case education scenario soon so schools know
whether to cut or hold steady.

“The point is, districts have to plan for the worst case,” said nonpartisan Legislative Analyst Mac Taylor. “So even if voters do approve, (schools) may have to start the year as if the money is not going to be there.”

K-12 districts will begin making high-stakes budget decisions soon, most notably how many layoff warnings to send by March 15.

They
say they can ill afford to wait until June 15, the legislative budget
deadline, to begin negotiating with teacher unions. Nor can they wait
until November, when Brown expects voters to decide whether to pass his
multibillion-dollar tax hike on sales and upper- income earners.

Each
year, district leaders build their budgets by assuming the worst, using
the governor’s January plan as a blueprint. But unions resist such
worst-case budgeting if it costs jobs.

Brown administration officials are talking as though the cuts won’t be made for the start of the school year.

“The
choices under our budget are very clear,” said Department of Finance
spokesman H.D. Palmer. “If the measure passes, we know where things
stand. If they don’t, we know there will be a … reduction in January
’13. We want to start the discussion with school officials about what
contingency measures we can pursue to help manage a very difficult
situation.”

Planning ahead is particularly challenging this year
because Brown’s education proposal relies on complex legal and political
moves to work around voter-approved education funding requirements.

“What’s
the Churchill line, a riddle wrapped in a mystery inside an enigma?”
said Bob Blattner, a veteran education lobbyist, using the British prime
minister’s description of Russia to describe Brown’s school financing
proposal.

The biggest unknown is the tax measure. If the measure passes, K-12 schools and community colleges
will receive about $2.4 billion that Brown wants to use to retire past
borrowing. If the measure fails, Brown wants schools to continue their
borrowing and absorb a $2.4 billion cut in program funding, about 5
percent statewide.

School districts have to assess whether Brown
can actually persuade lawmakers to go along with his $2.4 billion
program cut – and overcome any legal obstacles – in a worst-case
scenario.

Locally, the Sacramento County Office of Education
has signaled that districts should expect to receive the same amount of
money next year that they received this year. County Superintendent of
Schools David W. Gordon said that may change as education officials
continue to analyze Brown’s budget.

The governor’s plan will have
varying impacts across the state depending on how districts have dealt
with past budget cuts, such as whether they spent one-time federal funds
for ongoing programs or imposed cuts rather than borrowing against
state IOUs.

Despite an assumption that funding will remain flat,
Sacramento City Unified School District is preparing for a $28 million
cut, or roughly 8 percent, according to spokesman Gabe Ross. That’s
because the district faces declining enrollment, a lack of federal funds
that patched recent budgets and labor costs that rise annually. Brown’s
budget forgoes a 3.17 percent cost-of-living increase.

Districts
also face different scenarios based on whether their programs are
specifically targeted. For instance, rural and inner-city districts may
plan for deeper cuts because the governor has eliminated school bus
funding. Schools that offer transitional kindergarten for children born
between September and December stand to lose that money.

Read more here: http://www.sacbee.com/2012/01/12/4181845/budget.html#mi_rss=Top%20Stories#storylink=cpy
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