VIRGINIA AVENUE PARK — School officials praised hard-working teachers, dedicated parents and a “unique” relationship with City Hall for the continued success of the Santa Monica-Malibu Unified School District despite budgetary pressures from the state and other outside forces.

A record number of parents and community notables turned out for the third annual State of Our Schools event, which highlighted improvements in test scores and student preparedness alongside a general uncertainty about the district’s financial future.

According to numbers provided by Superintendent Sandra Lyon, overall student achievement in the district continues to outpace the state average, with scores consistently on the rise since 2007.

The district also can boast far higher percentages of students passing the high school exit exams and Advanced Placement tests, which are exams given at the end of college-level courses offered in the local high schools.

Last year, 478 attended four-year universities, and 338 graduating seniors went onto two-year community colleges.

That success comes with the lowest revenue limits the district has seen since the 2005-06 school year, staff reductions, class size increases and promises of more on the way.

“We do more with less,” Lyon said. “It’s not hyperbole. It’s fact.”

California lags behind almost every other state in per-pupil spending. The state contributes $8,908 per student compared to the average $11,764 across the rest of the nation.

Devastating cuts from the state level resulting from brutal budgets and a down economy have slashed at core services, ending in growing class sizes and fewer programs.

Local funding sources shielded SMMUSD from the worst of the cuts weathered by other local districts.

Community for Excellent Public Schools, a local group of school advocates, rallied support for a number of successful funding efforts, including parcel taxes that raise $10.7 million annually and Proposition Y, a 2010 ballot measure which will raise at least $5.5 million for the district this year.

Overall, the district receives $32.7 million from local sources, or approximately 29 percent of its funding.

“The relationship between (City Hall) and the district is unheard of in other communities,” Lyon said.

More cuts loom on the horizon if Gov. Jerry Brown fails to convince Californians to pass a sales tax increase and income tax hike for those making over $250,000 on the November ballot. The uncertainty makes it difficult, if not impossible, to adequately plan, Lyon said.

“We plan for the future and hope for the best, and everyone knows that hope is not a strategy,” she said.

The district is looking at a $5 million deficit for the current year, rising to over $6 million in 2012-13.

If the tax doesn’t pass in November, that jumps to $10.7 million.

The Board of Education and administration have made deep cuts at the district office to keep reductions as far from the classrooms as possible, said Board President Ben Allen.

More will be necessary to close the existing deficit, a hard thing to balance when over 80 percent of costs come from staff.

The district faces many challenges other than cash flow moving forward.

Although there’s been improvement, the gap in test scores and achievement between students of color and their white and Asian counterparts remains vast.

Schools receiving Title 1 funds from the federal government have been pushed to the brink of “program improvement” requirements, which restrict local controls.

An acrimonious debate over a new fundraising model which aims to end parent-funding of school programs soured relations between residents in the city of Malibu and the district, and a movement to secede from the district was backed by the Malibu City Council.

County officials will provide an update on the progress of that petition at the beginning of March, said Jan Maez, the district’s chief financial officer.

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