Santa Monica Schools Balance Budget With Reserves
The Santa Monica-Malibu Board of Education has cut the district’s financial reserves by more than half to approve a balanced $41.8-million budget for the 1988-89 school year.
The board dipped into the reserves to make up a $1.2-million deficit in the 1988-89 school budget and avoid layoffs and program cuts. The board voted 4 to 0 Wednesday night to close the gap by slicing the district’s reserves from $2.2 million to about $900,000.
The action leaves the district with little room to maneuver in an emergency. The Los Angeles County Office of Education recommends that districts maintain at least a 3% reserve; Santa Monica-Malibu’s cushion is now 2%.
“We are living hand-to-mouth if you will,” Supt. Eugene Tucker said. “We are living very close, and we might be in trouble if there is a major shift in our enrollment or if a large, unanticipated expense comes in, or if there is some major error in our calculations.”
‘Fairly Safe’ Reserve
However, Tucker said the amount of money put aside by Santa Monica-Malibu district is “fairly safe.”
Tucker and other school officials said that the chances of problems developing are slight because the budget allows for unexpected expenses.
To balance this year’s budget, the district has relied on revenues from a variety of sources.
In addition to state funding, which makes up the bulk of the revenues, the district will receive $500,000 from the city of Santa Monica.
The district will receive additional state money for the nearly 400 students who attend on special child-care permits because their parents work in the district.
The district expects to save almost $500,000 in salaries next year after 46 district teachers and other educators opted for early retirement under an incentive program. The employees were replaced by new teachers at lower pay.
No Program Cuts
“It’s a miracle,” said school board President Peggy Lyons after the board’s action Wednesday. “We managed to balance the budget . . . without having to cut programs or staff.”
Lyons said that the real crunch will come in November when voters are asked to renew a $58-dollar-a-year tax on each parcel of land in the district. The tax produces annual revenues of $1.5 million a year, but the tax is set to expire next year. Proposition KK on the ballot will extend the tax at the same rate for another six years. “We can’t afford to lose the parcel tax,” she said.