Complex Public School Funding Issue Explained by LCUSD's Bill Loose

Bill Loose, La Cañada Unified School District deputy superintendent for fiscal and human resources, explained some of the intricacies of public school funding in a press release given out last week.

There has been some confusion regarding certain aspects of the ongoing contract talks between the LCUSD and the La Cañada Teacher Association, particularly in terms of additional funding received by the district and the correct COLA (cost of living allowance) the teachers will be expected to receive in their new contract.

In the release, Loose explained that some sources have said that the district will be getting 5.5 percent in additional funding for 2005-2006. This additional funding, he said, will come from state statutory COLA (4.23 percent) and deficit reduction funds from the state (1.23 percent).

In the release, Loose cautioned that the district can't add or subtract these figures to determine a final new funding percentage for LCUSD. This complex calculation also includes increases and decreases in a number of programs.

In the LCUSD budget for 2005-2006, the unrestricted revenue from the state is projected to increase by $744,000, approximately 3.55 percent. In addition, the restricted revenue from the state will increase by about $95,000 or 2.1 percent for the year. With an increase in federal funding, the press release said, the total net gain in both state and federal revenue is $910,000 or about 3.5 percent for the year.

Loose also explained what a deficit factor is in dealing with the budget. He said the deficit factor is a percentage deducted from the increased revenue owed by the state school districts. This occurs, the press release said, in budget years when the state decided not to fully fund the schools. The current year's deficit factor is now 0.909 percent, down from the previous projection of 1.132 percent. The deficit factor was 3.02 percent for the 2003-2004 school year and 2.143 percent for the 2004-2005 school year.

Loose described what deficit reduction funds are. In the release, he said that in some budget years, the State of California does not give public schools the full funding owed by law. In a future budget year, when the state decides to pay off debt, school districts will receive deficit reduction funds to help make up the amounts owed during the previous years.

He said that it is possible that a school district could have both a deficit factor and deficit reduction funding in the same year and that this will occur in the LCUSD in the 2005-2006 school year. One way to view the matter, Loose said, is that the state is retiring old debts from a prior year while taking on new debts in the current year.

Loose said in the release that the LCUSD is receiving approximately $271 per day per student in ADA (average daily attendance) funding from the state.

Loose compared funding increases in the district over a three school year period. Combining revenue limit funding and other state revenue, the LCUSD received $24,837,756 in 2003-2004, $25,508,385 in 2004-2005 and will receive an estimated $26,347,225 for 2005-2006.

He said, by calculating the total state funding per ADA, the district got $5,854 in 2003-2004, $6,082 in 2004-2005 and is expected to get $6,305 in 2005-2006.

Loose explained in the release that if the district settles soon with the LCTA, the district will need to make a salary adjustment in its 2004-2005 and 2005-2006 budgets.

The district has offered a 1.9 percent salary adjustment for teachers retroactive to July 1, 2004, has continued to offer the 1.9 salary increase for 2005-2006 and place an additional 1.5 percent ongoing salary raise beginning retroactively to July 1, 2005. Loose said the salary adjustment will cost the LCUSD approximately $742,000.

Loose said the district has already settled with the classified employees union and the association representing the administrative staff and that their compensation increases are included in the 2005-2006 budget.

To maintain the district's educational program and its high academic achievements, a number of full and partial positions have been recently added to the budget, the release said.

The new full time positions include Korean language, social science/ELD and chemistry/physics instructors and a fifth-grade teacher at La Cañada Elementary. Partial positions include a kindergarten teacher at Paradise Canyon, choral music teacher and a principal for Foothills School, special education program.

Besides salary and benefits, Loose said in the release that there are also several important budget demands. He said state mandated requirements include maintaining a 3 percent reserve for economic uncertainties, fully fund the routine facilities maintenance fund at 3 percent and fully fund the deferred maintenance at one-half of 1 percent of the LCUSD's general fund.

The district, the release said, must also fund the obligation of medical benefits for retirees, pay the cost of sewer connections for the Foothill Intermediate School and Lanterman properties and continue to supplement special education requirements by approximately $2.25 million from the unrestricted funds.

These factors, Loose said, combined with other requirements and the fact that about 85 percent of the district budget already goes for personnel salaries and benefits, "makes the complete district budget picture very tight."

For more information on district budget matters, visit

- Ralph Saenz,

Letcia Cheng

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