By Charly SHELTON
“If I had to give one word looking forward I’d say caution. Not doom and gloom, not oh my goodness, we just need to be cautious and thoughtful in how we approach some of the hardships we’ve seen in the past,” said Robert McEntire, chief business and financial officer for the Glendale Unified School District, when addressing the school board.
At the bi-weekly GUSD Board of Education meeting last week, McEntire gave a presentation on the upcoming school year’s budget, which will be adopted on June 21, as well as previewing the next four years of budgets. Many aspects of the budget spending, as they are state funds, are dictated by the state.
GUSD recently received the May revision from Gov. Jerry Brown, McEntire said. Some of the main points, for the first time, were that the governor is really tempering the language and tone, in the last six years or so, of the state of the economy. “And by tempering, I mean he’s publicly acknowledging that we’re seven years into the recovery and a typical recovery is five years and so we can’t just keep blindly expecting long-term continued growth in our financial forecasting.”
After years of cuts to the state’s education program and increasingly more demands and supplications on how to spend the funds, the governor has proposed a Local Control Funding Formula to bring districts back to where they were several years ago. Unfortunately, there is some discrepancy in the accounting of funds and implementation of the formula between the state and GUSD’s calculations. The state’s position is that the program has now been restored by 95.7%, but GUSD forecasts lower. Some funds are being double counted, others are being paid to other requirements, McEntire said. The 2015-16 school year was tough and the Total Unrestricted General Fund Balance came in lower than expected – by quite a bit.
“We see that we are projected to close the year with a fund balance of about $33.2 million,” McEntire said. “That’s about $600,000 more than we closed last year but it’s $19 million below what we projected to end this year. We projected to end the year [with a] $52 million fund balance.”
There are many factors causing the change in projections and ending balance, including the amount of revenue coming in, the change in student population and the recent disbursement of retroactive pay increases for two years to the teachers after contract negotiations. But this problem may rear its head again as the Cost of Living Adjustment (COLA) for next year is 0%, reduced from a proposed 0.5% in January.
“The state budget shows a shortfall of $4 billion by 2019-20 and, as we know, when the state has a budget problem, we have a budget problem,” McEntire said.
As stated in the presentation, by the 2019-20 school year the ending balance will be negative $6,165,655. The unassigned ending balance drops each year from a projected $9.4 million next year to $219,247 in the 2017-18 school year and $193,859 in the 2018-19 year.
One thing that would drastically improve the outcome of the coming years is Proposition 30, up for a vote in November. The ballot measure would expand and make permanent the tax increase that passed under the same proposition in 2012. The current budget does not reflect any Prop 30 monies as they are not guaranteed yet, but they could make a difference.
“It’s going to be bad [even] if Prop 30 passes but catastrophic if it doesn’t,” McEntire said. “Continuation of Prop 30 or any portion of it would be beneficial to the continued flattening of our funding levels rather than [their] decreasing.”
To see McEntire’s full presentation and to download the PDF of the PowerPoint with more detailed figures and other aspects of the budget planning, visit GUSD.net.