Sacramento Bee: School districts wait state revenue: brace for more cuts

School districts wait to see if state revenue shortfalls trigger more cuts

By Diana Lambert Sacramento BeePublished: Monday, Oct. 31, 2011 - 12:00 am | Page 1B

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School officials are on the edge of their seats.

In six weeks, they should know if they have to cut buses, shorten the school year, ask teachers to take furlough days, raid their reserves or cut programs.

That's when revised revenue projections are expected from the state. If revenues fall short, it could trigger up to $1.75 billion in cuts that would hit K-12 districts in February.

The state was $654 million short of its revenue projections at the beginning of October, but school officials aren't sure how much their districts will lose and what exactly they will do if the trigger is pulled.

"It's almost impossible (to know)," said Rhonda Crawford, chief financial officer for Folsom Cordova Unified. "We do the best we can with what we know and what we can anticipate."

Schools could lose 4 percent of their state revenue for student attendance if the trigger is pulled, as well $248 million in funds for bus transportation. The amount schools would lose depends on how close the state is to its revenue goal.

"The moving target continues to be the biggest challenge," said Gabe Ross, spokesman for Sacramento City Unified.

Meanwhile, Assembly Bill 114, passed in July, makes it difficult for districts to squirrel away money just in case. The bill says school officials must ignore the prospect of the trigger and maintain staffing and program levels at the same funding level as last year.

So most districts scuttled the "worst-case scenario" budgets they had prepared before the state's revised budget was approved and rehired many teachers and restored programs.

Now districts have fewer options, although state legislators have given districts permission to cut the school year by another seven days. Some districts have already cut the school year from the previous minimum of 180 to 175 days.

But cutting days must be negotiated with employee unions and, even if contracts are reopened, it isn't likely negotiations could be completed in two months.

"Because we've already closed our contracts for this school year, it would be difficult to get everyone back at the table," Crawford said.

There are exceptions. San Juan Unified's unions have agreed to take up to five furlough days if the trigger is pulled. And the Sacramento City Teachers Association contract allows both the union and the district opportunities to reopen the contract several times a year, Ross said.

With transportation funding, however, there is little flexibility. Most districts have eliminated all but the most rural routes and federally mandated busing for special needs students.

Ross of Sacramento City Unified said transportation is critical for kids living in urban areas. "We considered cutting transportation last year and luckily we didn't have to," he said. "Our preference would be not to look at it."

Officials from both Folsom Cordova and Natomas unified districts say they won't cut programs this school year, even if the state cuts funding. Folsom Cordova officials said they will rely on one-time federal stimulus dollars and other belt-tightening measures to save programs. Natomas Unified will be able to fall back on a $5 million cushion, said Walt Hanline, interim superintendent.

And, while district officials stopped short of saying they budgeted conservatively in case the trigger is pulled to comply with the new law, they do say they are analyzing district jobs and programs to find efficiencies.
They are concerned about how the faltering economy, state deferrals of school funds and budget cuts will affect their school districts over the next two years, they say.

Ron Bennet, president of School Services of California, which advises districts on fiscal matters, issued a report warning that economic indicators are pointing toward budget shortfalls for the next few years. He warns school districts to continue to negotiate with unions for concessions, to cut costs and to hold on to reserves.

"To even think we are going to have two more years of even further cuts then we've experienced, it boggles the mind," said Steven Ladd, superintendent of Elk Grove Unified.

Hanline said a trigger for the 2013-14 school year "becomes Armageddon" as teacher agreements sunset and districts run out of federal stimulus money aimed at creating jobs.

In preparation, he has turned to a committee of more than 50 community members and employees who are working on goals and objectives for the district to propose to the school board.

"We are going to make the cuts from the bottom of the priority list," he said.