State Funding Bill Veto Hits Schools Hard

The five South Bay school districts with declining enrollments say their financial problems were again ignored last week when Gov. George Deukmejian vetoed a special funding bill.

At the same time, school officials acknowledged, another bill that won the governor’s approval gave them some temporary breathing room in another area of financial concern. It allows the districts to use interest income from the sale of school property, along with money earned from leasing closed schools, to help pay their operating costs.

Many of the districts with declining enrollments had been transferring that income to their general funds for years, but the state attorney general ruled earlier this year that interest and lease funds must be added to the principal and reserved for capital expenditures.

The measure signed by Deukmejian after the end of the legislative session allows the districts to spend all of their interest and lease income as they wish for three years. After that, the districts must phase out the practice over a 5-year period.

The vetoed funding, which easily passed both houses of the Legislature, would have provided only relatively small additions to the budgets of the five area school systems. But even slight relief can make a critical difference in tight budgets, school officials said.

Schools Disappointed

“We were counting dearly on that money,” said Ed King, business manager for the South Bay Union High School District, which would have received $225,000. “The governor’s veto left us hurting badly.”

King recalled that Deukmejian vetoed a similar measure last year, but he said hopes were higher this year because of a concerted lobbying effort by 30 to 40 districts throughout the state that have declining enrollments.

King said that State Sen. Robert G. Beverly (R-Manhattan Beach) carried the bill and went all-out for it.

He said his district is going through a 3-year enrollment slump “between baby booms.” The district, which now has 3,500 students--down from about 4,000--expects enrollment to drop by about 500 a year until it levels off at about 2,600 students in 1991-92, he said.

Under the state funding formula based on average daily attendance, 100 fewer high school students results in a $350,000 loss in revenue, King said. Roughly half of that loss can be offset by laying off employees, but “the custodian still has to come in and clean the rooms, the lights are still on and with everything else, there isn’t really that much change in overhead costs,” he said.

Raises Imperiled

King said money from the vetoed bill would have gone for salary increases. “But at this time we have nothing to offer,” he said. “It’s very frustrating for all of us, but we have to work together and get through this.”

South Bay Union’s $15-million general fund includes $1.4 million in interest from the sale of Aviation High School. “Obviously, we couldn’t make it at all, if they took that interest money away from us,” King said.

Nancy Mahr, a spokeswoman for the Palos Verdes Peninsula Unified School District, said planners in her district also had been counting on their $204,000 share from the vetoed funding bill.

“We have been trying to work out some sort of reasonable salary increases for the staff and the extra money would have given us more flexibility,” she said.

Negotiations with employees are continuing, she said, with the unions asking for a 10% raise and the district proposing a 4.1% cost-of-living increase. Mahr said a 70% to 90% increase in health insurance premiums is a major factor in the talks, and what kind of salary and benefit package the district can afford.

Decline in Enrollment

The peninsula district’s enrollment dropped by 525 students this year, causing a loss of $1.5 million in state funding in a $31-million general fund, Mahr said. Current enrollment is 9,284, compared to 9,810 last year, she said. The per-student payment for high school districts is higher than that for unified districts.

Mahr said school officials were relieved that they won’t have to withdraw $500,000 in interest and lease income from the district’s operating budget. “But over the long term, we’ll lose the use of that income” under the bill signed by Deukmejian, she said.

Other South Bay districts that lost out when Deukmejian vetoed the special funding bill are Torrance Unified, $148,000; Centinela Valley Union High, $39,000, and El Segundo Unified, $21,000.

Torrance and El Segundo have been allocating interest income from the sale of surplus school sites to their general funds. Torrance is realizing $1 million in interest and lease income annually and El Segundo $220,000 in annual lease income.

DISTRICTS AFFECTED BY VETO

SCHOOL SPECIAL BUDGET ENROLLMENT ENROLLMENT DISTRICT FUND LOSS SEPT.1988 CHANGE* Torrance $148,000 $73 million 18,800 -200 Centinela $ 39,000 $24 million 6,111 +151 El Segundo $ 21,000 $ 7.8 million 1,933 +43 South Bay Union $225,000 $15 million 3,500 -500 Palos Verdes $204,000 $31 million 9,284 Peninsula

* Enrollment change from 1987-88 school year to 1988-89