OCEAN PARK BLVD. — First the bad news about the local public schools.

A financial predicament is about to become even more problematic for the Santa Monica-Malibu Unified School District, which is projecting an operating deficit of $10 million this year and is sure to feel a big hit from an estimated $21 billion state budget shortfall.

The good news is despite the fiscal woes of the district, students are continuing to show improvement in academic achievement, scoring high marks on advanced placement and mandatory state tests.

The update was delivered during the annual State of the Schools presentation on Wednesday night at the John Muir Elementary/Santa Monica Alternative School House campus, hosted by the Community for Excellent Public Schools, the Santa Monica-Malibu Council of PTAs and the SMMUSD.

For many the financial state of the school district didn’t come as a surprise, a battle that officials have been fighting for more than a year as the state, which ranks in the bottom tier for per-pupil funding in the country, has been cutting revenue and is expected to make more for the 2010-11 fiscal year.

In the current fiscal year, the district is receiving about $6,258 per student from the state, the same level of funding as the 2004-05 school year.

“So we’re receiving less than we had in the past,” Superintendent Tim Cuneo said.

The district receives an additional $2,257 per student from local sources, which includes parcel tax measures and money from both the cities of Malibu and Santa Monica.

The national average for per pupil spending last year was approximately $10,850, while the average for California was $9,921. On the higher end of the spectrum is New Jersey where the per pupil spending was around $16,000.

Approximately 72 percent of the district’s revenues comes from the state.

“So when the state economy is in the tank, so are we,” Cuneo said.

Approximately 84 percent of the district’s budget is spent on personnel, including 49 percent for certificated staff, 15 percent for classified employees and 20 percent for benefits.

District officials are currently negotiating with bargaining groups, including the Santa Monica-Malibu Classroom Teachers Association, SEIU and administrators, to make adjustments in salaries and benefits.

“If we don’t make changes in our expenditures we won’t be able to survive because we can’t bank on Sacramento right now on providing us with the kinds of funds we need,” Cuneo said.

The presentation included speaker Pam Brady, who is the immediate past president of the California PTA and served 12 years on the SMMUSD Board of Education. She called on parents in attendance to continue fighting for education and demand that the state funding cuts are not acceptable.

“I ask you to be the dream keepers and make sure they understand that to build California and to be strong again, we need to invest in our children,” she said.

The evening wasn’t filled with just bad news.

SMMUSD students outscored their peers again on the state Academic Performance Index and California High School Exit Examination.

They also continue to score well on the advanced placement tests. More than 1,000 students took at least one AP course last year, 146 of whom passed three exams with a score of three or better. A half dozen students scored a four or five on eight AP tests.

Samohi then and now

The presentation featured a slide show on notable alumni — both celebrity and non-famous — who have gone on to achieve success in their respective fields.

They include astronaut Randy Bresnik, who graduated in 1985 and left for a space expedition on Monday. There’s also actor Sean Penn, 1978, Everclear lead guitarist Art Alexakis, ‘79, Vermont house representative Kesha Ram, 2004, talk show host Carson Daly, 1991, and Nobel Peace Prize winner Jeremy Pal, 1988.

The list also includes two current school board members — Oscar de la Torre and Ben Allen.

de la Torre, who is also the executive director of the Pico Youth and Family Center, said he came from a family of eight children with parents who immigrated from Mexico and didn’t have higher than a sixth grade education completed. Many of his siblings went on to college and de la Torre was the first to receive a master’s degree — from the University of Texas.

“That right there says a lot about our school district where we can take people from hard backgrounds, not the wealthiest families with not a lot of education in those families, but because of the support of teachers, educators … we can support young people and have them reach their dreams,” he said. “For me that is something that is every important that we remember we’re not just teaching children to read and write, we’re also inculcating values.”

The evening concluded with a panel of Santa Monica High School educators and students who talked about their experiences on campus.

The panel included a special education teacher, administrator, Spanish teacher, an up-and-coming student rebounding after a challenging year, a student enrolled in the Advancement Via Individual Determination program for minority, low income and first generation college students, and an honors student who is involved in many extra-curricular activities.

Lisa Johnson, a special ed teacher whose children attended the school, said being on the campus has been a gift for her to watch her kids flourish.

“The community there is a community that my kids have been able to thrive on,” Johnson said.