School District Releases Somber 3-Year Budget Projections

Last week's school district meeting had a bittersweet tone to it.

The auditor gave the  (MVWSD) a clean bill of health and noted the district's 7.45 percent in cash reserves, well above the 3 percent minimum required by the state. MVWSD also announced that Google had renewed its lease of the Slater Elementary School for its child care program, the Children's Center at the Woods, a collaboration that has brought needed revenue to the district.

But these moments were tempered by the reality that the state budget has not been released by Gov.-elect Jerry Brown, and mid-year cuts to education seem inevitable.

"With the high unemployment rate and lower income tax revenue, less money comes from the state," said Shaw-lee Ouyang, the district's chief business officer. "It's a whole chain reaction to the benefits we see. We rely heavily on local revenue and federal money. We hope that the state government can work out some of its issues with this new administration."

Brown's administration, however, appears to have its hands tied. At an education summit on Tuesday in Los Angeles, Brown acknowledged the state's $28 billion deficit and said, "We're going to do everything we can to minimize cuts to public schools. I can't promise you there won't be more cuts, because there will be."

MVWSD operates in a deficit right now. The 2010-2011 general fund has $40,662,765, and the district needs another $1.15 million to balance its budget. The district, as the auditor noted, does have a little more than $2 million in undesignated reserves this year. That excess will almost disappear by school year 2012-2013.

According to Ouyang's conservative budget projections, the general fund will remains stable over the next three years, reaching $40,938,809 in 2012-2013. This figure comes from savings in the district's "fair share" payments to the state school fund under Proposition 98, the successful 1988 ballot initiative where districts must contribute a fair share of their property tax revenue to the state, unless a change in per student expenditure occurs.

Between 2010 and 2013, MVWSD projects a modest growth in student enrollment and in the average daily attendance but not in local property taxes. As a result, the district will have to hire teachers to maintain the mandatory student-to-teacher ratio—an added expenditure that would qualify the district for a break in fair share payments.

In light of these savings, however, the board of trustees realized that without more money from the state and with the imminent mid-year cuts, the next few years could be painful and could "result in structural changes," said Superintendent Craig Goldman.

"I'm glad we only project out three years, because we can see what's going to happen," said Trustee Steve Olsen.