Friday, February 26, 2010

Budget Crisis (aka Here we go again)

By now everyone who reads the paper knows the State of CA will be cutting funding for schools again. Even under the proposed "no cuts to education" plan, education will take a ~$2B hit. So what does that mean to us?

The Board is busy working with staff and stakeholders to determine the best plan to move forward. We are wrestling with both a short-term budget crunch as well as a long term structural issue.

But didn't we slash programs last year? Isn't that enough? Yes, we made significant cuts last year. At that time, we had a budget plan that should have kept us solvent for the next 6 years. Unfortunately the economy has worsened and tax revenues are down across the State. This ends up hitting the district.

But I thought we were Basic Aid, and cuts wouldn't affect us? Yes, the district is Basic Aid, which means we get to keep most of our property tax revenue. Unfortunately there are two things that work against us.

(1) Some of our expenses will continue to climb. Health benefit costs for our employees continue to increase every year, and to a lesser extent other expenses do also.

(2) The district will take a "Fair Share" hit to our revenue, along with Revenue Limit districts. Essentially this could be viewed as a political gesture, whereby it is wiser to participate in the sacrifice that affects all of the districts across the state so that we protect the concept of basic aid as a whole. Otherwise, given the small number of basic aid districts statewide, Basic Aid status would become a political target for elimination completely.

So what are you going to do? We are considering as many options as possible. In the near term, we are legally required to notify staff of possible layoffs. The deadline for this notification is in early March. If the budget gets better, we can rescind some or all of those notices.

What is the real impact to program? We haven't determined that yet. We are faced with some difficult choices. Staff has indicated a willingness to consider some furlough days, and we are grateful for that participation. That could help close some of the gap. We are also looking at a sweep of some funds from the "site level" back to the district. It is possible that some class sizes will increase next year also. Some scenarios have this being very modest, and some would be much more drastic. All three of these measures may not be enough. There aren't any easy answers.

Are we considering closing a school? I've heard from several people asking about this. As of this writing, there hasn't been any discussion about closing a school. I cannot guarantee that this would never happen. I can only speak for myself in saying that I would not look to that idea as a way to solve the short-term problem. There is a structural issue out there as well - our deficits get bigger in future years- but I would want to look at a complete picture, including increased parcel tax, a possible bond measure, private grants, and all other options. I would look at any structural changes such as changes to the number of sites we operate as a more strategic question, not a tactical "how-do-we-close-the-gap-this-year" measure. Again, as of this writing, I do not know of any plan to close a school site.

The situation is definitely serious. Our budget has been slashed for so many years, it's beyond crazy. Most every program that we consider part of a rich education - music, art, PE, libraries, etc - is funded by outside donations. It is a difficult time for schools everywhere. Los Altos is fortunate to have the support of so many community members, but the news is not going to be good this year.

I would encourage people to come to the Board meetings and make your voices heard. Please bring constructive suggestions. I've often heard people come and say "please don't cut this". We really need folks to help by suggesting where we *can* save money, or where additional revenues can be found.

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