Budget cuts 'drastic' for local schools Budget cuts 'drastic' for local schools (January 22, 2003)

** Local elementary districts could lose $6.7 million if governor's proposals are adopted.

By Marjorie Mader
Almanac Staff Writer

Menlo Park, Las Lomitas, Portola Valley and Woodside elementary school districts are reeling from the news of unprecedented budget cuts -- totaling an estimated $6.7 million -- they would face if Gov. Gray Davis's budget proposals are enacted by the California Legislature.

Calling the proposed cuts "devastating," "completely out of left field," and "a major policy change in school funding," school leaders now must cope with heavy-duty issues. These could involve laying off teachers, cutting or paring down programs that have flourished in recent years, and freezing expenditures.

The districts are working to determine the impact of the proposed two-stage budget cuts: Those to be made to the current budget and additional proposed cuts to for the 2003-04 fiscal year. The districts are developing strategies for lobbying the Legislature and informing their community.

The most difficult challenge will be to develop a 2003-04 budget for their districts this spring when they won't know the amount of the actual reductions until months later, probably August, after the adoption of the state budget. Personnel costs are approximately 85 percent of a district's budget. Districts are required to give notice of intent to teachers by March 15 that they will not rehired for the next year.

In Menlo Park, trustees used the term "Gray Friday," referring to January 10, when Gov. Davis outlined his proposed budgets cuts, causing panic and uproar in the education community.

The proposed cuts are a double whammy for Menlo Park, Las Lomitas, Portola Valley and Woodside districts because they are among the 59 "basic aid" districts in California. These districts in recent years have received a basic-aid guarantee of $120 per pupil from the state and have been able to keep their local property tax revenues above the district's revenue limit.

Now, these districts face the possible elimination of the $120 basic-aid guarantee in 2003-04, in addition to losing an estimated 79 to 85 percent of the local property tax revenues they receive in excess of the district's revenue limit. Originally established by law in 1972, the per-pupil revenue limit varies from district to district.

Where and how the state will use the excess property tax revenue is not spelled out in the proposal. The general impression is that these funds will be used to "back fill" other reductions in the governor's proposed budget and not be redistributed to other school districts.

'Need to fight'

"We have worked too long and too hard to build our schools back from the devastation of Proposition 13'' (that limited local property tax rates), said Terry Thygesen, president of the Menlo Park school board at its January 16 meeting. "We need to fight this tooth and nail. It's a total dismantling of what's good in education."

Lee Anderson, president of the Las Lomitas board, called the governor's proposals "shocking and troubling," after the board discussed them at its meeting January 15.

He said districts generally acknowledged they would shoulder their "fair share" of the budget cuts. But in this proposal for 2003-04, "money is being taken from basic-aid communities, and these districts will be losing a disproportional share of their revenues without an increase in revenue for lower-wealth districts."

Mr. Anderson said he believes it will be difficult for the State Department of Finance to change the formula for basic-aid districts and implement them on such short notice.

Portola Valley

Trustees at the Portola Valley board meeting January 15 were shocked by the possible impact of the proposed cuts on their district. Superintendent Nancy Spaeth and Business Manager Tim Hanretty said they will immediately start looking at expenditures, possible staffing cuts for next year, and ways to cope with the expected decrease in revenue.

Board President Barbara Seipp said representatives of the Portola Valley Schools Foundation have stepped forward to offer support. The foundation plans to launch its annual campaign in the fall this year and stage a gala event next spring, she said.

Woodside

Lori Livingston, president of the Woodside board, called the governor's proposals a "major, major change in education policy. This is the sort of public policy issue that should have been debated in the public arena for the past five years," she said.

She said the budget proposals would be discussed at the Woodside board's meeting on Wednesday, January 22, at 4 p.m. in the school library. "We will be looking at a range of options, vigorously fighting the proposals and doing contingency planning in the event that proposals are adopted.

Impact on elementary districts

Elementary school district business managers -- Dee Modderman for the Menlo Park and Las Lomitas districts, and Tim Hanretty for the Portola Valley and Woodside districts -- estimate the following local impacts if Gov. Gray Davis' proposed budget cuts are enacted.
Mid-year cuts

The governor's proposal calls for the following mid-year cuts to the current budget for school districts:

** A 2.15 percent reduction to each district's revenue limit.

** Across the board cuts of 10.82 percent for categorical programs. These include a one-time reduction in the state's program to reduce class sizes in grades K-3 and reductions for instructional materials, staff development buyout, school safety, school improvement programs, deferred maintenance and education technology.

** A 3.66 reduction in special education and hourly programs.

The estimated revenue losses by district are: Menlo Park, $374, 693; Las Lomitas, $112,343; Portola Valley, $53,966 (could amount to $120,913 if almost all of the basic-aid guarantee is eliminated); Woodside, $38, 299 (could amount to $80,962 if almost all of the basic-aid guarantee is eliminated).

The Legislature is expected to act on the governor's mid-year proposals by January 31.

Proposed 2003-04 cuts

The governor's proposal for the 2003-04 budget year includes these further reductions:

** No cost-of living adjustment.

** Reduced revenue-limit rates carry forward. Basic-aid districts would lose the $120 state guarantee plus 85 percent of their excess property taxes.

** All mid-year cuts in categorical programs are continued -- except for class-size reduction, special education and hourly programs. In addition, there would be a 1.28 percent reduction in all categorical program funding. Virtually all Education Code sections associated with the categorical programs would be eliminated, and the funds would be folded into a block grant, giving districts flexibility to use the funds for the general purpose of staff development, instructional materials and technology, specialized and targeted instructions programs, school safety, and student services.

** The governor proposes to use all of the federal special education aid to offset state aid to special education.

** Funding for class-size reduction would return to $906 per student, but the total dollar amount of state funding would thereafter remain constant. If districts gain students in these grades, the funding would not increase.

** Continue to require districts to have a reserve of 3 percent of their total budget for maintenance.

Estimated revenue losses by district are: Menlo Park, $2,110,504; Las Lomitas, $1,898,066; Portola Valley, ,$1,473, 842; Woodside, $666,155. The scale of the losses, for example, equal the cost of 19 fulltime teachers in Portola Valley, and nine fulltime teachers in Woodside.