By Robert W. Graeff, Ed.D.
Ramona Unified School District
As superintendent of our local school district, I have been asked daily for the past several weeks about the status of our district budget — especially when other districts in the San Diego area have been making headlines on a regular basis related to mid-year cuts, school closures, bargaining, and potential insolvency. In spite of our very unpleasant circumstances in the midst of our most challenging era since the Great Depression, it is important for parents and community members to know exactly where our local schools stand.
As approved in June, our district’s current $50 million budget once again calls for expenditures which are $3.7 million more than our anticipated revenue. Since the beginning of the state’s budget woes several years ago and the ensuing massive cuts to public education, the district has consistently been experiencing annual budget shortfalls — in spite of employee layoffs, elimination of key programs, and reduced supplies and materials for our classrooms.
With nearly 90% of our expenses tied up in people (salary and health insurance), we have been buoyed by a large reserve fund (now depleted), the American Recovery and Reinvestment Act (now depleted), and the Federal Jobs Bill (now depleted). In the current year, we entered July with $980,000 above our legally required minimum reserve fund of 3.0%. That small reserve excess will be exhausted before year’s end. Assuming there are no mid-year budget cuts provided by Sacramento (a big gamble), we will end the current year with an ending balance of $2.1 million.
Assuming the state maintains our current revenue stream for next year, issues no mid-year cuts this year, and provides a cost-of-living increase to public schools (all highly optimistic assumptions), the district is still pointed toward a budget shortfall of $4.9 million. The increasing deficit is due to three annual factors: declining student enrollment, rising health insurance costs for employees, and step-and-column salary increases for employees.
Comparing increasing costs to our projected revenue, we are projecting an end-of-year deficit of $2.8 million — an anticipated situation which cannot be approved by our Board or the County Office of Education. In 2013-14, we are projecting an even larger deficit of $8.3 million. If the state imposes mid-year budget cuts due to the much publicized threat of potential “triggers” in mid-December, our challenge will grow that much worse. Clearly, the governing board has no option this year but to take steps to bring the district’s expenses in line with its revenue.
The district has faced budget shortfalls several times since 2003, but has always managed to pay its bills. Now that our local reserve funds are finally depleted and with no “silver bullets” on the horizon from either the state or federal governments, the district finally has no other recourse but to look from within for budget resolution. Certainly, community members have read multiple stories of surrounding school districts and public agencies which have already faced this same budget dilemma and made some very hard choices to bring their expenses in line with declining state support. Now it is our turn.