School District Grapples with Budget; 2015 Parcel Tax Possibility Looms

With little information coming down from Sacramento about the legislature's budget plans, local school district officials said they've struggled to plan for 2012-13. 

In a presentation before the school board last week, Assistant Superintendent Laurie Harden said it would be important to prepare for the worst. 

And even in the best case scenario, she said, local schools will continue to get less than what they're owed by the state, which will exacerbate existing challenges related to budgeting and cashflow. 

"It's grim. It's not pretty," Harden told the board. "They've left us to be reactive and not proactive. We certainly don't want to alarm everyone, but we have to be very aware of the potential for really drastic cuts in the near future."

Harden outlined two scenarios, hinging on the fate of Gov. Jerry Brown's proposed tax initiative, following the November 2012 elections.

If Brown's initiative passes, Albany will continue, at least hypothetically, to receive "flat funding," or approximately $5,700 per "Average Daily Attendance." (This formula determines general purpose school funding and is derived from the actual days of student attendance divided by the total number of days in the regular school year; it is impacted by student absences due to moving, dropping out or illness.)

But even in the "flat funding," or "best case scenario," that Harden outlined, the state actually gives Albany hundreds of dollars per student less than it is owed due to the state's own budget woes. As a result, the state owes the district roughly $3 million. Theoretically, the district will get this money back, but there's no telling how long it will take, Harden explained. 

(See Harden's budget presentation to the board, as well as the full 2012-13 budget, as PDFs along with this story.)

Harden said, if the November tax initiative fails, the district would face what she described as an "incredibly devastating" ongoing loss of $1.6 million, or $455 per student. 

But she added that there is some skepticism about how districts would truly handle that scenario, with numerous people saying that would simply "never happen because so many districts would be bankrupt."

"It would be dire," she said. "I can't even imagine it would happen, but I don't know." 

Some districts have used furlough days to try to fill the gap; others have continued to eat into their reserve funds. 

Albany is projected to maintain an 11.64 percent reserve of its roughly $34 million budget in 2012-13. Though that may seem healthy, Harden told the board, that number could rapidly shrink to just 3 or 4 percent by 2014-15 depending on what happens at the state level. 

Regardless of what happens in November, the school district faces a "structural deficit."

"We're still spending more than we're bringing in," said Harden. 

Added : "There will be reductions coming up this year to reduce that deficit."

Stephenson said the district is looking at a "postive attendance program" to reward students for regular attendance, which in turn could positively impact Average Daily Attendance and bring in more money from the state. But she noted that it's a steep challenge "to raise attendance rates by even 1 percent."

In 2011-12, 59 percent of the district's $32.8 million budget came from the state revenue limit; another 18 percent came from other state revenue, with an additional 18 percent from local parcel taxes. The remaining 5 percent came from federal revenue and local fundraising efforts.

Because the vast majority, or 88 percent, of the district's budget is spent on salaries and benefits, cutbacks are likely to mean layoffs. 

"When you start talking about budget reductions," said Harden, "you really do talk about people and programs. With 90 percent of your budget going to people, that's really what you start looking at, unfortunately."

In 2012-13, the state is projected to provide about $1,500 less per student than it owes Albany. The district makes up for that deficit using . 

The money from the parcel taxes was intended to be used, said Superintendent Stephenson, "to enhance an already rich, rigorous curriculum."

Instead, the district has needed to use that money "to pay for our ongoing expenses.... The intent, should we not see a turnaround of the state economy, is that we will begin to look at the renewal of the emergency parcel tax, at least that, in 2014." 

The expiration of the , which is set to end in 2015, would mean a revenue loss of $1.2 million for Albany schools.

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Watch video archives of school district meetings online here.

If there's something in this article you think , or if something else is amiss, call editor Emilie Raguso at 510-459-8325 or email albany@patch.com.