May 18, 2022 Breaking News, Latest News, and Videos

SMMUSD Superintendent Warns of Fiscal Challenges

Low state funding, transition to basic-aid among culprits

By Sam Catanzaro

The head of the Santa Monica-Malibu Unified School District (SMMUSD) is warning of fiscal challenges facing the district, saying that reserve funds are “too low for comfort”.

On November 22, SMMUSD Superintendent Dr. Ben Drati released a letter to parents and staff titled “SMMUSD Budget: Challenges and Opportunities Ahead.”

“At this point, SMMUSD’s fund balance is too low for comfort; our reserves are lower than they should be, and there is no indication in the near future that there will be an increase in revenue from state, federal or local sources of funding,” Drati said.

Drati pointed to the State of California as the source of many of the issues facing the district. California ranks 41st in the nation in education funding, and Drati said that state funding has been “extremely volatile” for years.

“Like many other districts in the State of California, SMMUSD has been challenged by a structural fiscal deficit spending cycle for a long time. This means that our operational expenditures are greater than the revenues we receive in combined state, federal and local funding,” Drati said.

According to the district, some factors behind the revenue deficit include increases in healthcare and other employee-related costs and in general operations, including the costs of supplies and services. In addition, Drati said SMMUSD is faced with a growing teacher shortage, a crisis that confronts school districts throughout the nation.

“Housing prices on the westside of Los Angeles have risen dramatically, which impacts our employees, many of whom cannot afford to live nearby and must endure long commutes to and from work,” Drati said.

According to two recent surveys, Santa Monica is one of the most expensive places to both rent an apartment and buy a home.

SMMUSD is in the process of transitioning to a “basic aid” (locally-funded) district and Drati says that this transition has lead to less state funds for the district.

“Basic aid districts receive little state funding, because their revenue from local property taxes exceeds what they would receive under the state’s Local Control Funding Formula. In the long run, basic aid will likely be very positive for our district, but in the short term, it creates unique challenges, including the loss of funding guarantees for certain expenses that were previously funded by the state,” Drati said. “Given the district’s chronic structural deficit and our transition to basic aid, we need to take a fresh look at our expenditures and develop a sustainable budget. This is often painful for a school community to do. And yet, I believe that there are opportunities for us to successfully address these issues in our district.”

More information about the new budget planning process, which the district says will include an examination of data, educational trends and input from parents and stakeholders, will be likely be announced in the new year.

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