NUSD's Five Budget Realities for 2012-13
As the Novato Unified School District completes the 2011-12 school year with marked improvement in student achievement; we again face the challenges of a state budget that significantly underfunds education. This is the fifth year that school districts have not received a state Cost of Living Adjustment (COLA) and instead are being funded at 77% of the revenue limit. For NUSD, the non-funding of a COLA represents a loss of $1.6 million dollars for the 2012-13 year. The total loss of funding for the five years is $39 million which is equivalent to one year's funding for NUSD.
Budget Reality #1 - The Governor's Budget Does Not Increase School Funding. School funding will decrease by $441 per student, or $3.3 million for NUSD, if the November tax measure fails.
A flat budget is really a negative budget as a Cost of Living Adjustment is not provided to give the necessary funding for Step and Column growth, increases for insurance, utilities, books and other supplies, and the loss of federal one time funding. NUSD will pay out $2.5 million more in expenditures than it will receive in revenues. Had the State funded the stated COLA, NUSD would have received an increase of $212 per student or $1.6 million.
The State budget assumes that the tax initiative will be approved by voters in November 2012. Should that not occur then funding for schools will be cut in January 2013 (7th month of the school year). For NUSD, the estimated cut will be $3.3 million or $441 per student.
Budget Reality #2 - NUSD's Expenses Exceed NUSD's Revenues
For the past four years, Novato Unified School District has been able to offset the shortfall of revenues due to one-time Federal stimulus funding. Funding for 6.6 FTE certificated positions and 20.53 classified positions was provided by the $1.6 million from the Federal Jobs Bill last year. That funding is not continued into the 2012-13 year resulting in deficit spending as positions were maintained rather than eliminated. As there will not be any additional state funding or federal funding coming in, district costs were reduced in the 2012-13 year and significant cuts will be needed for the 2013-14 and 2014-15 years to correct the structural deficit. Employee salary and benefits comprise 89% of the expenditures of the district.
Budget Reality #3 - NUSD Has a Multi-Year Structural Deficit That Must Be Corrected
To achieve and sustain financial solvency, it is necessary to solve the multi-year structural deficit with ongoing expense reductions. Difficult decisions need to be made to reverse the current spending plan where expenses exceed revenues. A study of comparative districts prepared by School Services of California will provide data as to class size ratios, teacher work days, instructional days, staff work days, spending levels per student for books, supplies and services. Together, the school community consisting of teachers, classified workers, administrators, parents, community members and trustees, will examine the study along with the district budget to present solutions to fix the structural deficit. The Budget Advisory Committee will begin meeting in early August to begin this work. Additionally, program budgeting was introduced to the district with principals and budget managers responsible for identifying and implementing over $700,000 in budget reductions for 2012-13.
Budget Reality #4 - Given No New Revenues, New Local Resources Must Be Identified and Current Sources Must Continue At The Current Rate or Increased
The largest revenue source for the district is from the Revenue Limit which makes up 65% of the total revenue as compared to 67% in 2007-08. It is imperative that students attend school each day for instructional and funding purposes and that the district identifies alternative solutions when students are unable to attend. Investment in technology and other solutions will be required. Additionally, the district is undergoing a facility study that will provide information on how to maximize assets in order to generate revenues or to lessen the burden on the operating fund.
Currently, the district receives $4.3 million from a $251 parcel tax that expires in 2015. This funding provides for many things, including but limited to, libraries, counselors, athletics, instructional technology, reducing class size, and attracting and maintaining staff. The parcel tax has been the safety net for the district providing much needed funding for district positions. It is critical that the district continues to receive the support of the community through this parcel tax.
Budget Reality #5 - Given No New Revenues and Known Increases in Expenses, Both Employee Concessions and Layoffs Must be Considered
With flat funding provided from the state, possible mid-year reductions estimated at $3.3 million, expenditures exceeding revenues, and that salaries and benefits comprise 89% of the NUSD's unrestricted budget, the District has few options with which to overcome the budget shortfalls.
Governor Brown and the Legislators in adopting the 2012-13 budget provided for school districts to reduce the number of instructional days from 180 to 160 days both in 2012-13 and 2013-14 for a total of 40 days over the two year period.
Funding for school districts in California continues to be uncertain and inadequate. However, the needs of the 8,000 students at the 13 school sites in the Novato Unified School District remain constant. It is because of these children who receive instruction and other services from dedicated teachers, staff, administrators, food services workers, bus drivers, and the very many others that make the decisions clear and meaningful. Difficult financial decisions are before us; however, I am confident that together with student and family needs identified, the NUSD community will come together to make those difficult decisions.
Karen Maloney
