Glendale and Burbank school districts are facing structural deficits of $19.5 million and $6 million, respectively, in 2012-13 officials said this week, even if California voters pass a November tax initiative meant to bolster state coffers.
The district projections came on the heels of Gov. Jerry Brown’s May revision to the state budget, which now includes a $16-billion deficit. The governor’s plan to balance the budget depends in part on a tax initiative that will go before voters in November and is expected to generate more than $6 billion in revenue.
If the initiative fails, K-12 schools and community colleges stand to lose an additional $5.5 billion. In Glendale, that could translate to as much as $450 per student, or $11.5 million, officials said.
“Basically, it is an ‘all or nothing’ on the tax initiatives,” Glendale Unified Supt. Dick Sheehan said. “But one of the things we do want to make clear is, even if the taxes pass, we as a district will still need to make some cuts as we move forward.”
Burbank officials estimate that their share of the additional $5.5-billion state cut would be about $5.5 million. School board President Debbie Kutka and her colleagues are preparing two budget scenarios — one based on the guaranteed $6-million reduction and the second on a roughly $12-million reduction, which would become reality if the tax initiative fails.
“We just need to be ready,” Kutka said. “We as a board are going to try and come up with a plan, depending on what happens, so it will be easy to switch gears as quickly as we need to.”
Glendale Unified, which this year has an annual operating budget of $161 million, will cover its deficit spending next year with a combination of fund transfers and reserves, said Eva Lueck, chief business and financial officer.
Still, by 2013-14, savings will have been exhausted. Assuming even year-to-year funding of about $5,222 per student, the projected structural deficit will grow to $24.5 million in 2013-14, and to $28.1 million in 2014-15, Lueck said.
“It’s sad — this is our best-case scenario,” Lueck said. “This is if we get flat funding from the state and we get no further cuts. This isn’t if the November election fails. This is truly where we are at, going forward, and that is a huge challenge.”
As it stands, Glendale Unified will have expended many of its reserves at the end of the 2012-13 school year, including its special education fund and its post-employment benefit fund.
“We are spending millions and millions of dollars more than what we are bringing in, and we have been using reserves and one-time monies to cover that,” Glendale Unified school board President Christine Walters said.
District officials will convene in the coming weeks to hammer out a budget reduction plan, Lueck said. On the table will be personnel costs, including benefits and salaries, as well as layoffs, all of which could translate into larger class sizes, she said.
Five teacher furlough days, worth $458,450 each, remain on the books for 2012-13.
“We really need to do some internal soul searching and budget reductions as we move forward, no matter what happens with the November election,” Lueck said.