From the Desk of the Superintendent
Superintendent Deborah A. Flores, Ph.D.
Tuesday, April 15, 2003
Budget Reductions
On April 8, 2003, the Board of Education took action regarding budget reductions for the 2003-04 school year. The tables shown below outline the approved budget reductions. The purpose of this message is to provide information about the state budget, inform you of the status of both districts’ budgets, review the cuts themselves, and to let you know what future projections indicate. I believe it is important for staff, administrators, parents, and the community to have as much information as possible about the status of the districts’ budgets and the recent budget deliberations.
Status of the State Budget
The state budget deficit is estimated to be between $28 billion (the legislative analyst’s estimate) and $34 billion (the governor’s estimate). Since the total state budget is about $100 billion, either of these numbers is staggering, and will no doubt have long term effects on the financial status of the state. Early in this school year (2003-04), Governor Davis proposed mid-year cuts in education as he had done the previous year. The legislature did not agree with the governor’s proposal and spent most of the year working out a final resolution. The good news about the final agreement between the legislature and the governor, reached in late March, is that there were only a few real cuts in the current year’s budget. Most of the reduction in education expenditures was accomplished through what are called "deferrals." The bad news is that since very few real cuts were made in the current school year, the cuts will likely be deeper in the 2003-04 school year.
In January, the governor released his proposed education budget for the 2003-04 school year. This budget proposal does not include a cost of living increase (COLA) and it includes cuts in most categorical programs. In May, he will release a revised version of his budget proposal called the "May Revise." Most experts are warning that the cuts in education in the "May Revise" may be worse than those proposed in January. In a management bulletin to superintendents, dated April 3, 2003, Jack O’Connell, Superintendent of Public Instruction, voiced his concerns as follows:
" Given the unprecedented size of the current budget deficit, the one-time nature of most of the current-year reductions, and the already heated discussions taking place regarding the various proposals in the governor’s budget, the 2003-04 budget negotiations are likely to be prolonged. Regardless of when the budget is resolved, however, it is almost certain that local educational agencies will be subject to significant additional reductions in funding."
Of course, the "May Revise" is not the final word. The legislature and the governor will debate the specifics of the budget for months. Many are predicting that the state budget will not be approved until September 2003, long after school districts have adopted their budgets for 2003-04.
If the governor’s budget is approved, the impact on both districts’ budgets will be significant. Although our expenses will continue to increase by 3-4%, we will not receive the additional revenue needed through a COLA to cover these increased costs. For this reason, I recommended to the Board that both districts’ expenditures for the 2003-04 school year be reduced by 3-4%.
Our Local Financial Picture
Santa Barbara Elementary School District:
Total Budget = $41 Million
The elementary district budget has been a challenge the past three years and will be for the near future. The major factor affecting the elementary district budget has been declining enrollment, which is projected to continue. In 1998, at the peak of the elementary district’s growth, 6,431 students were enrolled in district elementary schools, including the charter schools. Currently, there are 6,066 students and the projections indicate that there will be 5,996 students in school year 2008. This is a decline of 435 students (equivalent to the enrollment of one elementary school) in just ten years. Also impacting this budget are (1) increasing health care costs, (2) insufficient funds from the state to cover expenditures, and (3) special education encroachment. During the past three years, in order to balance the elementary district budget and maintain the required 3% reserve, cuts were made in the approximate amounts of $350,000 (2000-01), $500,000 (2001-02), and $900,000 (2002-03). The total amount of the cuts approved at the April 8, 2003 board meeting for the 2003-04 school year is roughly $1.4 million.
Santa Barbara High School District:
Total Budget = $68 Million
Through this school year, the high school district budget could be described as "positive" or "healthy." Although the same negative impacts – increasing health care costs, insufficient funds from the state, and special education encroachment – have been present in this budget too, the major reason for the difference is increasing enrollment in the districts’ secondary schools. The high school district has steadily grown over the past ten years from 7,637 students in 1993 to 10,230 students in the current school year, an increase of 2,593 students in ten years. Projections indicate that the high school district will continue to grow through the 2005-06 school year with a projected peak of 10,826 students. Projections indicate that beginning in the 2006-07 school year, the high school district enrollment will begin to decline at a steady rate as the smaller stream of students in our elementary district and feeder districts make their way into the high school district. Although the high school district budget includes some projected growth in the 2003-04 school year, cuts were still needed because of the lack of a COLA, the proposed categorical reductions, and rising costs. At the April 8, 2003 board meeting, $2.4 million in cuts were approved.
Budget Reductions – Tables 1-4
(Tables are in this linked PDF file)
District Office Cuts – Table 2
The district office has represented a large percentage of the elementary district budget cuts over each of the past three years. Still, in order to reach the goal of $3.8 million in cuts between the two districts, it was necessary to make even more significant cuts this year at the district office. The district office cuts approved by the Board of Education total almost $800,000, including elimination of the following: two district office administrators; consultants; eight district office support staff; two maintenance and operations staff; board expenses; and the superintendent’s within county travel allowance. In the 2003-04 school year, all district management (which includes district office administrators) will receive a pay decrease. These cuts at the district office represent a 15% reduction in district office administration, 8% reduction in district office support staff, and a 5% reduction in maintenance and operations staff.
Elementary District – Table 3
We are now entering Year 4 of elementary district budget reductions. The budget reductions in each of the previous three years were equally difficult and painful. This year, the only places left to cut were people and programs (it should be noted that more than 80% of the budget is devoted to personnel costs). The $1.4 million in 2003-04 budget cuts approved by the board include a reduction in the number of librarians, from 7.2 FTEs* to 5.0 FTEs; a reduction in the level of district funding for the music program, from $170,000 to $120,000; the elimination of district funding for kindergarten aides (this will now be funded with categorical funds); a reduction in bussing for elementary students (by three busses); a reduction in the number of custodians (3.25 FTEs); and the reduction or elimination of various other less costly items.
High School District – Table 4
This was the first year of budget reductions for the high school district. While it was an equally agonizing process, it had to be done to prepare our secondary schools for the financial challenges that loom on the horizon. In order to reduce expenditures by 4%, almost $2.4 million in cuts, a long list of items was generated. By far, the most controversial item on staff’s list was the elimination of the 7-period day at the junior high level. The number of FTEs initially proposed for elimination was 22. After much input, discussion, and debate, the number eliminated was reduced to 10 FTEs. Thus, 12 FTEs were maintained to offer as many electives as possible at the junior high/middle school level. We are working on plans that will accommodate this change in staffing. At a later date, a letter will be mailed to junior high staff and parents outlining what the schedule will look like next year. The budget reduction proposal also included a requirement that classes have a minimum of 25 students in order to be offered. This was approved by the board and will go into effect September 2003. Additionally, the board approved the elimination of two assistant principal positions and their secretaries; reduction in the number of custodians (3.0 FTEs); and several less costly items were reduced or eliminated.
The Future
In order to plan for the next two years, staff developed budget projections for both districts for the 2003-04 and 2004-05 school years. These were shared with the board at the April 8th meeting. Certain highly-likely assumptions were included in these projections (e.g., no COLA, increase in step and class, increase in the cost of health benefits). Also included was continued decrease in the elementary district enrollment and small increases in the high school district enrollment. Based on these projections and assumptions, the following conclusions were shared with the board:
Elementary District –
Future Budget Considerations
- There are insufficient funds to support a salary increase for elementary district employees in school year 2002-03
and 2003-04.
- The elementary district budget can not afford more than a 10% increase in health benefits in school year 2003-04
(even though providers suggest that the increase will likely be 20%).
- In school year 2004-05, budget cuts of between $1.5 million and $2 million will likely be required in order to
balance the budget and maintain the 3% mandated reserve.
- Continued, careful monitoring of every expenditure will be required.
High School District –
Future Budget Considerations
- With the $2.4 million in cuts approved by the board for school year 2003-2004, the high school district budget
will remain sound for the next two school years.
- Depending on the future state budgets, and the growth/decline in our high school district enrollment, cuts may
be necessary in the 2004-05 school year.
- Continued, careful monitoring will be required to maintain a healthy high school district budget.
This is a very difficult time in our districts’ history and in the history of our state. Few can remember when it has been more challenging. All five board meetings about the budget were long and grueling. Many people attended these meetings and shared public comments about what to cut or not to cut. As with all other school districts throughout the state, it was difficult to make the cuts. But what was demonstrated by the participation of parents, staff, students, and community members was the tremendous level of commitment to our schools. Everyone involved spoke of the need to maintain the high quality of education that characterizes the schools in our elementary and high school districts. It is this same commitment that will get us through these most difficult times.
If there is a positive side to this budget situation, it is that it has caused widespread discussion about the method of funding public education. It has also focused community attention on the well being of local schools. Many businesses, individuals, and foundations are doing the best they can in a tight economy to "step up to the plate" and support schools through in-kind contributions and donations of time and dollars.
I would like to thank our staff, administrators, parents, and community and business partners for their dedication and hard work on behalf of our students. Our collective effort is what continues to place the Santa Barbara Elementary and High School Districts among the highest achieving districts in the state!
*FTE = full time equivalent
(These comments along with the referenced Tables are available in this PDF file.)