From the Desk of the Superintendent
Superintendent Deborah A. Flores, Ph.D.
March 24, 2002
Letter to the Community:
The budgets of the Santa Barbara Elementary and High School Districts have been the subject of extensive community dialogue. The word "budgets" is important to this discussion because while our schools are governed by one Board of Education and served by one District Office staff, from a legal and fiscal standpoint we are two separate districts with two separate operating budgets.
Our eleven-school Elementary District serves almost 5,900 children in grades K-6. Next year, the Elementary District will be funded at a level of $4,480 per student. The budget will be in excess of $38 million. Secondary districts are funded by the state at a different level. Our eight-school High School District serves more than 10,000 children in grades 7-12. Next year the High School District will be funded at a level of $5,370 per student. That budget will be in excess of $66.8 million.
Most major expenses in our two Districts are nearly identical (e.g., salaries, benefits, insurance, utilities). This makes the Elementary District budget particularly challenging as the revenue base is much lower. Whatever the similarities and differences, the budgets are independent of one another and funds cannot be co-mingled.
For at least the next five years, local elementary schools will continue to experience dramatic declines in enrollment, which many attribute to the cost of housing in our area. This is of tremendous concern as the impact of declining enrollment is far reaching, especially in the loss of revenue. In a few years, today’s decline at the elementary level will be felt at the junior high and high school levels.
Other major factors affecting our budgets include:
- unprecedented mid-year state budget cuts, brought about by the energy crisis, a drop in sales tax revenues, and the impact of the September 11 tragedies;
- 20-23% increases in health and welfare costs;
- the state’s proposed reduction of the 2002-2003 Cost Of Living Adjustment, currently estimated to be 1.8%, far below the increase in our operating costs;
- special education encroachment.
By way of explanation, special education encroachment is the difference between the funds received from the federal and state governments for special education versus the actual cost of providing services to identified special education students. In school year 2000-2001, the special education encroachment on the Elementary District’s general fund was $622,064 and the encroachment on the High School District’s general fund was $1,665,677. In school year 2001-2002, the number of identified special education students increased and the encroachment increased to $1,023,170 in the Elementary District and $2,939,101 in the High School District. The encroachment for 2002-2003 is expected to be significantly higher.
Our Elementary District and High School District budgets must be legally adopted by July 1 each year and must maintain a three-percent reserve. Any changes to the budgets must be approved by the Board. In the face of declining enrollment and other financial challenges during each of the past three years, our Elementary District budget has been painfully pared down to keep pace with reduced revenues and increased costs, all the while maintaining the required three-percent reserve. The strategy has been to keep the cuts as far away from the classroom as possible, for as long as possible, and to simultaneously work closely with site staffs and community partners to bring every resource and creative approach to budget-related discussions.
Meanwhile, our High School District maintains a very healthy budget. With a five percent reserve, including the three percent reserve required by law, there is currently no need to make cuts in that budget, either for this year or next year.
Our financial reporting is in compliance with state law. The state requires full budget reports within 45 days of the following three annual deadlines: adoption of the state budget, October 31, and January 31. We are on schedule. Currently, we are in the midst of changing from one financial information system to another, which will permit us to create more user-friendly budget reports. This change will also enable us to provide the Board and the public with monthly income and expense information in a consistent and clear format.
These are difficult financial times for public education. Despite these financial challenges, our dedicated teachers, staff, administrators, and Board members remain resolute in their commitment to providing the youth of this community with a top-notch education.