A budget study session held by the School Board on March 21 highlighted the structural deficit the District will be facing over the next several years and the difficult choices that need to be made.
The main cause of the deficit is the continual declining enrollment the District began experiencing in the 2004-05 school year and its link to the District budget. The District receives Average Daily Attendance (ADA) funds from the state for each student that attends school in the District. For this school year, the ADA is $5,627.84 per student and the District’s enrollment is 11,902 students. By the 2009-10 school year it is projected student enrollment will drop to 11,376 students.
ADA funding and State Revenue Limit Funding (Cost of Living Adjustments) are the primary sources of the District’s revenue. District documents prepared for the meeting state that “for declining enrollment school districts, increases in State Revenue Limit funding…are rarely sufficient to offset the loss of funding associated with the loss of students.”
The District’s interim Chief Financial Officer, Steve Hodgson, told the Board that reducing the number of teachers in the District will help offset the decline in revenues due to the enrollment decline. He projected that for the 2007-08 school year the District will have to reduce its teaching staff by seven, and in the following year six and one-half teachers would have to be reduced. He also made some other suggestions including examining and possibly adjusting the student/teacher ratios in the classrooms to help reduce the number of needed teachers. Staff reductions are the best approach to dealing with the deficit because, according to District documents, “School district expenditures, including those of this District, are directly related to personnel costs (salaries and benefits), which typically account for 80 percent to 90 percent of total expenditures.”
Hodgson stated that the principle for guiding the District’s future budgetary decisions should be to “maintain a balance between current and future-year income and expenditures so as to ensure the long-term financial integrity of the District.” He also stressed the District should “recognize that the highest financial priority is directly related to improving student achievement.”
Cynthia Torres, a member of the District’s Financial Oversight Committee, asked that the Board “develop a deficit elimination plan” that would ensure the District “maintains the required state reserve and eliminates the deficit by 2009-10.” She also requested that a report be prepared on policies and practices regarding accountability and budget transparency in six months.
Parent Rebecca Kennerly asked that the District create a Public Affairs Officer position. In her view, this position could become a revenue enhancement tool by helping to “retain students and attract residential students” by getting information out to the community about the District.
The Board will discuss the budget again at an additional meeting on April 25. The proposed District budget for 2007-08 will be presented to the Board on June 7 and a public hearing will be held by the Board on June 28. The approved budget will be filed with the Los Angeles County Office of Education on June 29.