REGIONAL: Educators expect another rough year financially

State budget cuts could cost local schools millions

By STACY BRANDT - Staff Writer | Wednesday, December 31, 2008 6:58 PM PST ∞

NORTH COUNTY ---- Last year was a rough one for school budgets, and this year is shaping up to be even worse.

Local districts are bracing for a painful 2009, based on the state's growing budget deficit and roughly $17 billion in proposed statewide cuts unveiled Wednesday by Gov. Arnold Schwarzenegger.

"I've been in this business a long time, and this is the worst I've ever seen it," said Gary Hamels, assistant superintendent in charge of San Marcos Unified School District's business services department.

Districts throughout North County have implemented hiring freezes, trimmed spending and discussed what else can go if they're hit with another round of state cuts. Earlier this year, most of the area's larger districts hacked millions of dollars from what they were expecting to spend.

Each time reductions are necessary, it becomes more difficult to decide what students and teachers can live without, said Robyn Phillips, associate superintendent at Oceanside Unified School District.

"Whatever low-hanging fruit there was has already been used," she said.

Though district officials typically say their goal is to keep budget woes as far from the classroom as possible, it's usually necessary to cut at least some teachers or support staff. Salaries and benefits usually make up about 85 percent of a district's expenses.

'It's going to be pretty brutal'

Though officials use the word "cuts," school revenues have mostly gone up over the past several years ---- just not as quickly as expenses.

The current 2008-09 fiscal year was the first time in memory that state funding for school districts actually decreased.

For example in the Vista Unified School District, the budget for the current fiscal year is roughly $195.9 million ---- $600,000 less than the $196.5 million budget for the 2007-08 fiscal year. In 2006-07 the district's budget was $192 million and in 2004-05 it was $181 million.

(The district's enrollment has steadily declined over that same period.)

Still school officials say the rising cost of utilities, health care and employee salaries has far outpaced any growth in revenue. And now, with revenue actually shrinking, the outlook is especially grim.

Schwarzenegger's latest proposal includes billions of dollars in cuts to education, including shaving $2.1 billion from the current fiscal year that ends in June.

If the legislature approves that plan, it would require school districts to trim their budgets immediately. This would "severely hurt" every district in California, Hamels said.

"It's going to be pretty brutal throughout the state," he said.

Few solutions

The governor says the cuts are necessary to deal with a budget deficit that is expected to reach more than $40 billion by the middle of next year.

In May, Schwarzenegger is expected to present an updated budget proposal. It then will be up to the legislature to approve a final 2009-10 state budget. Though lawmakers are supposed to finalize the budget each year by the end of June, they rarely do. Last year, they didn't approve a budget until late September.

The current fiscal crisis could make budget negotiations even more difficult. Over the last several months, Republicans and Democrats have found little to agree on in dealing with the economic meltdown.

Most Republicans have opposed any new taxes, while Schwarzenegger and Democrats have sought a combination of spending cuts and tax increases. The governor's latest proposal calls for $14.3 billion in tax increases and $17.4 billing in spending cuts over the next 18 months.

Without decisive action from the legislature, the state could run out of money next month, officials have said.

"It's a real crisis," said Walter Freeman, assistant superintendent in charge of Carlsbad Unified's business services department. "The checkbook is about to run dry and they're up there playing checkers, or whatever it is that they're doing."

Waiting for word

As the drama unfolds in Sacramento, local school officials are waiting nervously for news from the Capitol.

"We know there's going to be some sort of a cut. We just don't know where it's going to be," said Donna Caperton, chief business officer at Vista Unified School District.

They also are hoping that state lawmakers will ease spending restrictions and other mandates, making it easier for districts to make needed cuts.

Last year, many school districts announced they would increase class sizes, eliminate transportation for some students, close campuses and lay off employees to make up for a growing budget gap. Most districts were eventually able to undo some of the changes when the state budget wasn't as dismal as they anticipated.

Some taxpayer advocates say school officials have exaggerated the threat of looming budget cuts in the past.

Money is tight for everyone, and it's only fair that school districts shoulder some of the burden, said Lani Lutar, president of the San Diego County Taxpayers Association.

School officials should work with employee unions to reduce costs, she said.

"It doesn't necessarily have to have an impact on the service level," Lutar said, "if the teachers, administrators and all the unions are willing to accept some of the pain that is inevitable and that we're all having to experience as a community."

But school district officials say as education funding from Sacramento shrinks, the sting will be felt all over.

Each round of cuts requires schools to go deeper, meaning this year's cuts will probably be even more painful than last year's, Caperton said.

"Last year ... it didn't have a severe impact on the instructional program at the schools," she said. "This year, they'll feel it."

Contact staff writer Stacy Brandt at (760) 901-4009 or sbrandt@nctimes.com.