Official: School district budget OK for now

The school district has avoided furloughs and reducing the school year, but looming budget cuts threaten its stability, according to a top school official.

Newport-Mesa Unified can pay its bills and maintain the mandated 3% reserves for the next two years, but could face as much as $15 million in cuts to remain solvent in 2013-14, district Chief Business Official and Deputy Supt. Paul Reed said during a presentation on the district's second interim report at the March 13 school board meeting.

"We hope for the best, but we prepare for the worst, and that's really all school districts can do," he said.

How much the district has to cut depends on what happens in Sacramento, with the worst-case scenario at $15 million if Gov. Jerry Brown's proposed tax increases fail at the ballot box.

But even if the tax initiative passes, the district could still need to cut to maintain its reserves for 2013-14.

As always, what will happen is unknown, Reed said.

"We're going to have a problem by 2013-14," he said. "We're going to have to take action next year."

During his presentation, Reed showed newspaper articles of the budget woes that districts around the state face, including furloughs, pink slips and impending insolvency.

Newport-Mesa is $4 million up from the first interim report in December.

Having basic-aid status — with revenue coming from local property taxes that fund the mandated per-student amount — has helped. The district also made about $25 million in cuts over the last couple of years, allowing it to maintain its 180-day school year, resources like librarians and counselors, and programs like art and music.

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