It’s Feast to Famine for School Districts

After five flush years of reducing class sizes and adding programs, school districts suddenly find themselves trimming arts and science offerings, packing more students into classrooms and even laying off staff.

Blame the energy crisis, which has dried up expected increases in state funding for education. Or the huge raises most districts handed out to teachers last year.

The number of affected school systems is unknown, but the state’s Fiscal Crisis and Management Assistance Team, an agency that helps districts work out financial problems, reports an increasing number of calls from districts large and small saying they can’t seem to make ends meet.

In the Berkeley public schools, playground supervisors are being laid off and more students stuffed into each classroom because trustees had to slash $5 million from an $80-million budget.

“The last few years were uplifting, encouraging times,” said Steve Goldstone, superintendent of the 9,500-student system. “And now we’re right back where we’ve been for so many years, cutting budgets, which is depressing, because it hurts kids.”

In the 34,000-student Saddleback Valley Unified School District in Orange County, nearly 70 clerical, custodial and administrative jobs have been cut, and the board may consider teacher layoffs next spring if the situation doesn’t improve.

“The reversal is here,” said Barry Blade, Saddleback’s assistant superintendent for business services. “It’s somber. This is a tremendous turnaround from last September. . . . It’s anguish.”

Even districts that have kept costs down are feeling the pinch.

Los Angeles Unified is leaving administrative jobs open and cutting back on outside contractors.

This year’s budget woes are an especially bitter pill for parents and administrators because, after decades of hard times, school funding had started to turn the corner. State programs to reduce primary-grade classes to no more than 20 children and reward schools with high scores on standardized tests put new money on campuses.

Also last year, the state gave more unrestricted money to districts than most had ever seen in a single year--nearly $3 billion total--and encouraged districts to pass it on to teachers to compensate for paltry pay raises during the early 1990s recession.

The huge cost-of-living increase given by the state ignited a virtual “arms race” of raises as districts competed for teachers in a tight market, aid Rob Bennett, president of School Services of California, a consulting firm that helps districts with financial issues.

The problem, he said, is that most school systems handed out higher raises than they could afford, failing to take into account related expenses: When salaries go up, so do Social Security payments and some other benefits. In addition, health insurance costs rose more than expected.

“There was a lot of pressure to keep up with the district next door,” said Jan Sterling, director of school fiscal services for the state Department of Education. “Everyone is speculating that there may be some trouble out there in the next year or two.”

Education is still a priority for Gov. Gray Davis, but there is just less money available, said Ann Bancroft, spokeswoman for state Education Secretary Kerry Mazzoni. The state budget has not yet been signed, but it appears likely that schools will get a 3.8% cost-of-living increase, as well as money to offset rising energy costs.

Most school districts in California adopt a preliminary budget in the late spring or early summer, based on the state’s budget projections. Once the state budget is finalized, districts typically make changes to their budgets if necessary.

“We’d all like it to be like last year,” Bancroft said. “But considering the way things are--this is a belt-tightening year--I think education has fared pretty well.”

It often doesn’t feel that way at the local level.

“I was devastated,” said Karen Kirby, PTA Council president for the Saddleback schools. “We were making such headway in public education in California and then--bam!--cuts, cuts, cuts.”

In the small Eureka City Unified School District in Northern California, administrators say the double-digit raise it handed teachers last year was “a back breaker,” forcing the district to cut nearly 8% out of its general fund budget for next year.

All spring, emergency school board meetings felt more like wakes, as parents and trustees lamented dying programs. Seven teachers were laid off (although most were later rehired); an elementary school was closed; special education, independent study and midmorning snacks were cut back. More cuts are expected next year.

Eureka gave teachers the 10% raise, even though officials knew they couldn’t afford it, said Supt. Jim Scott, because they couldn’t stomach the political consequences of not giving it.

School leaders figured that they would have to make some cuts to pay for the raises, but they banked on more money coming from the state this year to tide them over.

The gamble failed. Instead, enrollment in the 5,500-student district declined, meaning less money from the state, and the costs of health benefits and Social Security went up more than projected. Health insurance expenses alone rose about 15%.

The result: Eureka teetered on the brink of bankruptcy and warned county and state officials this spring that it might not be able to meet financial obligations in the next few years.

“Did you see the movie ‘The Perfect Storm?’ ” asked Scott, referring to the film in which a series of events combined to create a catastrophic maelstrom. “That’s what happened to us.”

Trims Even in Affluent Irvine

Even the highly ranked Irvine schools--boosted by a $2.25-million donation from their fund-raising foundation--are trimming back some science, art and music offerings and raising class sizes in all but grades 1-3--which are locked in at no more than 20 students per class.

“We are all suffering,” said Patricia Clarke White, superintendent of the 23,000-student district.

It’s a scenario that is being repeated up and down the state, said Tom Henry, chief administrative officer of the Fiscal Crisis and Management Assistance Team.

“It’s become a very difficult balancing act,” he said. “It’s one thing to commit the money six months ago, but then you have to start developing a budget, and that’s when the related costs kick in, and how do you balance your budget? There’s only one way to do that. . . . They have to cut.”

One district, tiny Emery Unified in the Bay Area, required an emergency loan from the state to keep classrooms open, Henry said.

The president of the state’s teachers union, though, says school districts are just crying poor to avoid giving teachers decent raises. Some districts, such as Sacramento Unified and the Anaheim Union High School District, have been able to balance their budgets without making huge cuts, he said.

“We’re hearing about the cuts and it’s absurd,” said Wayne Johnson, president of the California Teachers Assn. Many districts in the state are in the middle of salary and contract negotiations with their teachers, and Johnson said districts are exaggerating their budget troubles to avoid giving raises. Even districts that gave increases they could afford are saying they must make cuts because of rising benefit and energy costs and less money than expected from Sacramento.

Los Angeles Unified has slashed $140 million out of its $6-billion preliminary budget to pay for teacher salary and benefits increases averaging 15%, said Joseph Zeronian, chief financial officer.

“It’s not a rosy picture,” he said, but not a disaster either. Despite dire warnings that the new teacher contract would be a budget buster, Zeronian balanced the books of the 723,000-student district without touching core academic programs and even managed to fund a new math initiative. He shaved $30 million from administration, mostly by eliminating positions, though there were a few layoffs, he said. Nearly $100 million was saved by curtailing growth in special education programs, taking back funds not spent from last year’s budget and transferring some costs to a separate budget for facilities.

Revamp of Program Saves $5 Million

A program for at-risk students in continuation schools was reorganized, saving $5 million. A modest expansion of arts programs is still under consideration.

Zeronian said he does not foresee cuts over the next three years if the state provides modest cost-of-living increases.

In the Santa Monica-Malibu Unified School District, a $1-million budget shortfall this year meant axing an administrator’s job and trimming back on supplies, said Supt. John Deasy. But for the next three years, the 12,500-student district is projecting a deficit of $3 million to $6 million.

“This is my second day on the job,” Deasy said Friday, “and I would consider this to be my No. 1 concern.”

In Berkeley, officials gave a 9% raise last year, all they could afford. But, banking on more money coming down from Sacramento this year, officials promised teachers a 6% raise this year. That money won’t be arriving, so in addition to increasing class sizes, programs are being reorganized and nonteaching staff members laid off to give the teachers what was promised.

In the 80,000-student Fresno school district, where officials cut $25 million from their $790-million budget, each middle school will lose one teacher, causing class sizes to climb, and there could be layoffs of nonteaching staff.

Assistant principals are being cut in the Capistrano Unified School District in Orange County, along with library clerks. And some class sizes in the 44,000-student district are growing as $5.5 million is trimmed from the $320-million budget, said Supt. James Fleming.

“You’ve got a number of situations converging,” he said, “which have us going from the best fiscal year we’ve had in the last two decades to the worst.”

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Times education writer Doug Smith contributed to this story.