Not even a Dilbert comic strip could lighten the mood.
The Santa Monica-Malibu school district Board of Education stared down a $7.4-million deficit during Monday’s review of the preliminary budget for the 2015-16 school year.
The projected deficit weighing on the unrestricted $94.9-million general fund budget is due largely to a combination of proposed increases in special education and district-level staffing as well as the rising costs of employee benefits, reduced revenues for the district’s technical training program and an expected shortfall in annual fundraising.
Expenditures are forecast to top $102.3 million.
“We’ve got some hard numbers to swallow here,” board member Richard Tahvildaran-Jesswein said. “These numbers are problematic.”
The board’s study session came as the district prepares for the third year of its transition into the Local Control and Funding Formula program, which SMMUSD chief financial officer Jan Maez said puts more responsibility on the district to manage state funds.
The formula, which will be fully implemented by 2020-21, provides grants by grade level and supplemental money based on the number of English language learners, lunch discount recipients and foster youth.
The district is anticipating a slight decline in enrollment, from 11,295 students this year to 11,173 in 2015-16. As part of the new funding formula, the district is aiming for an average of a 24-to-1 student-to-teacher ratio across grades TK-3 next year.
Administrators and board members expressed concern about the deficit and said the budget would have to be altered before being finalized.
“We shouldn’t accept it at all,” Maez said. “We’re gonna have to figure out. That’s how the numbers play out at this point. It’s a concern … We’re really having to look at our general fund and set priorities and make some budgeting decisions.”
Another budget will be drafted by early June and public testimony will be heard June 24, but the obvious conclusion drawn by district officials was that cuts would be required before a final budget is approved June 29.
“If we put these numbers before the county, they would be sending our budget back to us,” Maez said.
Maez said the district would have to consider reducing school-based costs by $1 million, a move that would likely necessitate cuts in staffing. She said the district might have to reduce overhead costs by an additional $500,000.
The popular Regional Occupation Program, which is going through a transition to meet state standards, could see additional changes.
Maez also brought up what she sees as inefficient school sizes across the district.
“I won’t be the most popular person in the room, and I’m not suggesting that any school close, but we are running some really small schools,” she said. Essentially, it’s catching up with us. We’re not able to do it all, and we have to seriously decide what things are most important.”
Board member Oscar de la Torre said the district should consider hiring a grant writer to apply for additional state funds.
The board’s budget review came amid otherwise encouraging projections at the state level, where April tax revenues were $1.5 billion ahead of initial forecasts.
jeff@www.smdp.com