REGION: Schools cautiously optimistic about revised budget

Finance officials say it's too soon to determine local effects

By RANI GUPTA - Staff Writer | Wednesday, May 14, 2008 8:53 PM PDT ∞

School finance officials in Southwest County said they were cautiously optimistic about the revised state budget proposal that Gov. Arnold Schwarzenegger released Wednesday, but must see the details before they can determine how it will affect local districts.

Schwarzenegger proposed increasing kindergarten through 12th-grade education funding by nearly $1.5 billion above what was in his first proposed budget.

"It is obvious this is a better proposal for K-12 education than his January proposal," said Stacy Coleman, assistant superintendent of business services for the Murrieta Valley Unified School District.

Yet, Coleman, like other local education finance officers, is waiting until a workshop next week in which the education consulting firm School Services of California is expected to detail per-student allocations and other information that officials say will be crucial in determining the effect of the revised budget.

"There's a lot of things yet to understand," said Jeff Okun, assistant superintendent of business support services for the Temecula Valley Unified School District. "The devil on all this is in the details, not the words."

Schwarzenegger's latest proposal treats differently the two main types of funding school districts receive: general purpose funding, which is allocated to districts on a per-student basis, and categorical funding, which is earmarked for specific uses such as reduced class sizes.

The governor's January proposal had called for reducing the amount of general purpose money so school districts would receive less in the 2008-09 school year than they got in 2007-08. That allocation also did not take into account inflation, which is called for in state law.

The proposal released Wednesday would keep the amount of general purpose money allocated to school districts in the 2008-09 school year the same as for this year, but would not include a cost-of-living adjustment.

The new budget did not change most of the cuts to programs earmarked for specific purposes, such as class-size reduction and school counseling. Those programs would receive less money next school year under the governor's proposal.

"These cuts remain in today's proposal and have a real-world impact on our students," state Superintendent of Public Instruction Jack O'Connell said in a written statement.

O'Connell added that with increases in the cost of gas and food, "the failure to fund a cost-of-living adjustment amounts to a serious budget cut in practical terms."

Local school finance officials said they don't yet know whether the governor's revised budget could mean that some of the cuts school boards have already approved would be revisited. They said much would depend on what state legislators do with Schwarzenegger's proposal.

"Whether we're able to restore any of those, it's really going to depend on what actually happens with the budget," Okun said.

Based on the January budget proposal, school districts in Southwest County have been grappling with cuts in the range of $8 million to $11 million each.

Among the budget cuts local school boards have approved are the closing of Jean Hayman Elementary in Wildomar and Menifee Elementary, and possible layoffs to teaching and nonteaching employees in Temecula and Lake Elsinore. Murrieta's school board also approved issuing 14 layoff notices to teachers and other certificated employees, but said declining enrollment was to blame.

However, Wednesday's budget proposal could make it less likely that local school boards would need to make additional cuts.

"What I have seen at first blush is (if this is) in fact the budget the state ultimately adopts, I don't believe there will be a need to make further cuts," Coleman said Wednesday. However, Coleman cautioned he couldn't be sure of that until he analyzed the governor's proposal in more detail.

Unlike the governor's January proposal, the budget presented Wednesday would not call for a suspension of Proposition 98, a voter-approved amendment that guarantees a minimum level of funding for schools.

That stems in part from Schwarzenegger's proposed funding increase from his January budget. But it's also because state budget officials expect the amount required under Prop. 98 to decrease because of lower-than-expected state revenue.

In normal years, Prop. 98 requires that school districts receive the same amount of money as the previous year, adjusted for inflation and changes in enrollment. However, in low revenue years, a different calculation is used.

In January, the state had expected that Prop. 98 would require $59.6 billion in spending for the year starting July 1. Now, with the lower revenue expectations, the state expects that Prop. 98 will require $56.8 billion in 2008-09, compared to $56.6 billion in the current year.

Contact staff writer Rani Gupta at (951) 676-4315, Ext. 2625, or rgupta@californian.com.

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