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MUSD will make it this year and next |
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Thursday, 19 March 2009 |
By Erick Sugimura
Mammoth Times Staff Writer
 Mammoth Times Photo/Erick Sugimura MUSD Superintendent Dr. Frank Romero describes the ins and outs of the state of the school budget
In his presentation, Romero said that there were major reductions in all state programs, especially education. The state continues to raise taxes, borrow money and cut programs, he said.
Some of the revisions that Romero commented on in the 2009-10 state education budget are:
Prop 98 guarantees certain funds for education, but this year funds will be short about $8 billion.
The state is “taking the strings off some of the categorical funds” to allow flexibility within the districts as to where to prioritize some funds.
The Cost Of Living Allowance (COLA) was supposed to be .68 percent this year, but the state did away with it both this year and next.
The state will not relax the required statutory Reserve for Economic Uncertainty (REU) of 3 percent, which translates to about $400,000 for MUSD.
Romero also predicted that many county offices of education would be hit hard as he felt that as much as half the school districts in the state would have their budget certification drop from Positive to Qualified, meaning that the county would be obligated to assist them financially.
Upcoming impacts
Among the other uncertainties for the state school system is the special ballot on May 19. Of the 6 propositions on that ballot, three directly impact the state education budget: Proposition 1A, 1B and 1C.
Prop 1A will increase the state’s “rainy day fund” to support its day-to-day operations. However, it is joined with Prop 1B, which will reimburse schools the $8 billion short cut from the Prop 98 guaranteed money. This means that if either propsition fails, both will fail.
Prop 1C proposes the issuing of bonds against projected future lottery income, though paying it back would require that lottery income double from it’s current level. Considering the current economic times, Romero indicated that this might be an unreasonable expectation. If Prop 1C passes, it would fill the $5 billion hole in the state school budget, but if it fails, a three-quarters vote from both the House and Senate would be required to reopen the budget to try to fix the deficit.
Romero then acknowledged that $8 billion in federal stimulus funds would be flowing into the California education system in the future.
“Now that sounds like a lot of money,” Romero said. However, he described how the bulk of that money was going into three areas: Title 1, Individuals with Disabilities Education Act (IDEA), and Stabilization.
Title 1 programs are for disadvantaged and underperforming children. IDEA focuses on special needs children. But the Stabilization area, about 4.9 billion of the stimulus package, has not been clearly defined.
“The state has their eye on this money,” Romero said. “We don’t know how much we’ll get, when, or how we can use it.”
The state treasurer and head of the Department of Finance will be the ones who decide where that money can be spent.
“Two people can decide how 4.9 billion dollars will get spent,” Romero said in a follow-up interview. This is the way the law reads in regards to the Stabilization funds.
The state is also required to distribute the 4.9 billion within 27 months of receiving it and Romero commented that the state could possibly hold that money until the last day – by which point many school districts could be bankrupt.
Meanwhile, the state would be able to use the Stabilization funds to augument their own cash flow as long as they could replenish the fund by the end of the 27 months.
MUSD budget
resolution strategies
For the present, the MUSD has maintained control over its expenditures, monitored revenue postings, maintained a conservative fiscal projection, allowed a slight draw down of the REU and created a retirement incentive package.
“As a result of these strategies, we have a balanced budget and we brought down a $300,000 deficit,” Romero said. “We’re going to make it this year and we’re going to make it next year.”
“We are out of the woods, but still in the meadows,” Romero said, adding that the district could be ‘back in the woods’ depending on what happens next in terms of the May 19 special ballot, possible changes in categorical spending flexibility, changes in projected district expenditures, their ability to maximize the benefits of the new flexibility in categorical funds and the revised state budget that is supposed to be released on June 8.
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Last Updated ( Friday, 27 March 2009 )
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