The Santa Monica-Malibu school district’s budget appears relatively secure, at least for now.
Although Gov. Jerry Brown has highlighted the risk of another economic downturn, local officials said the state’s latest financial projections contain positive signs for public schools.
The rosy outlook is due in part to general economic growth, the restoration of funds that were sliced during the recent recession and the influx of taxes for education that voters approved in 2012.
Jan Maez, chief financial officer for SMMUSD, said Brown has done “a wonderful job” stabilizing the state budget in recent years.
“Next year appears to be a good year for schools,” she said during a budget presentation at the local Board of Education’s meeting March 3.
But Maez also cautioned that the sunny financial skies could soon turn stormy. She noted that the temporary taxes from Proposition 30 will come to an end, and she added that there’s always a possibility of turbulence in the economy.
“We need to start preparing for a slowdown,” Maez said, alluding to indications she’s received from state officials. “They’re not at all in a crisis mode. They’re not panicking. But they want us all to be aware that that’s a potential.”
Brown’s budget proposes Proposition 98 funding of $71.6 billion in 2016-17, an increase of $2.4 billion over the 2015-16 level.
The aforementioned funding includes $2.8 billion toward further implementation of the Local Control Funding Formula, which is gradually giving districts more responsibility in handling state money. That would mean an 85-percent implementation of the LCFF in the first four years of the system. The proposed 2016-17 growth would provide an average increase of $489 in per-pupil funding across the state, Maez said.
Once the program is fully in place, however, school districts will only be able to count on cost-of-living increases of approximately 2-3 percent each year, Maez said.
The governor’s budget also includes $1.6 billion in early education block grants and $1.2 billion for discretionary one-time uses, including content standards implementation, technology upgrades, professional development, programs for beginning teachers and deferred maintenance.
Maez said rules governing the cap on district reserves are not currently in play and that they probably won’t be in 2016-17. The rules require the district to explain their funding reserves if they are over certain levels.
“It’s something we need to be aware of and do some planning on,” she said.
So what do the state figures mean for SMMUSD?
The district anticipates LCFF revenue for 2016-17 to total about $90.7 million and one-time discretionary funds of about $2.3 million. Local district budgeting depends on LCFF revenue, enrollment projections, staffing allocations and employee benefits, among other factors.
Board member Jose Escarce noted that the district was funded above LCFF levels this year because it qualified for additional state aid.
Meanwhile, Maez said employer rates for the California State Teachers’ Retirement System will hit nearly 12.6 percent next year, up from 10.7 percent this year. No specific funds are being provided for the increased expense.