District may be headed toward fiscal slowdown

School budgets the past several years have been rosy, but signs are this may be changing, David Ostermann, assistant superintendent of administrative services for the Ramona Unified district, said.

“The big reason is the personal income tax in April,” he told trustees after the governor’s May budget update. “...That was lower by $1.2 billion (statewide) and that had a ripple effect.”

The decrease doesn’t affect education now, since the governor had put about $2 billion more than required into the state’s rainy day fund in January. But looking to the future, “we’re overdue for a recession, if you look at history,” said Ostermann.

Public hearings to consider the district’s proposed 2016-17 budget and its state-required Local Control and Accountability Plan, which is tied to the budget, will be held during the trustees’ June 16 meeting at 7 p.m. in Wilson Administrative Center, 720 Ninth St. Copies of both are online at www.ramonausd.net. Trustees are expected to vote on both during a special meeting on Tuesday, June 28.

The proposed budget shows $55.8 million in projected revenue and $56 million in projected expenditures. The multi-year projection shows ending balances dropping from $6.1 million in 2016-17 to $28,298 in 2018-19.

Trustee John Rajcic called employee retirement costs and declining enrollment “the elephant in the room.”

“Since we know that our costs are going up, we need to make sure that we’re not automatically backfilling when an employee moves from a position,” said trustee Bob Stoody. “...We need to look and see what the real tasks are, what the chores are, and how they can be filled in a more creative way possibly than the way we are doing it.”

Attrition is the least painful way to reduce expenditures, said Rajcic.

“Fiscal solvency is a major concern of this board,” he said.

State-required increases to employee retirement accounts “are a serious financial threat to all school districts in the state,” Ostermann states in his June 16 report to trustees.

Among cost increases Ostermann anticipates for the fiscal year that starts on July 1 are: Health benefits, $585,000; Employee Step/Column increases for years worked and additional education, $520,000; and CalSTRS (California State Teachers Retirement System), $410,000. Declining enrollment compounds the problem, he noted.

“I feel like we’re getting hit from all sides,” said trustee Rodger Dohm, recommending caution in spending one-time money the district receives. “We can throw the one-time dollars at the problem, but that just fixes it for one year. It doesn’t really solve the problem...We’re never really solving our overspending problem. Not that we created the problem.”