After years of turmoil, school district's finances could be improving

After years of turmoil, school district's finances could be improving

Michele Ellson

Alameda’s schools could be seeing a rosier financial picture as the state’s finances stabilize and changes to the way schools are funded are considered.

New budget projections approved by the Board of Education on Tuesday show the district continuing to eat into its reserves to cover its budget over the next few years, though Chief Business Officer Robert Shemwell said he thinks the numbers will look better by the time the school board considers a new budget in June.

Governor Jerry Brown’s budget proposal includes the first per-student state funding increase California’s school districts have seen since the 2006-2007 school year, Shemwell said. And Brown has said he plans to use funds collected from the temporary tax increases voters approved through Proposition 30 to pay down billions in IOUs to school districts over the next several years.

Brown has also proposed a major shift in the way the state funds schools that would eliminate a host of categorical programs that pay for specific things in favor of a funding formula that targets additional dollars toward low-income students and English language learners. Projections released by the state a few weeks ago show Alameda Unified’s per-student allotment growing by 50 percent between now and the 2019-2020 school year under the new formula Brown proposed.

In a March 8 letter to the community, Superintendent Kirsten Vital said that she’s encouraged by the numbers, but that questions about whether they’ll materialize remain. Vital said it’s unclear whether legislators will sign off on the proposal and, if they do, whether the state will collect enough in taxes to fund the anticipated increases.

The district’s current numbers reflect some but not all of the proposed changes, Shemwell said. He said the state’s plans should become clearer as district staff prepares next year’s budget for the school board’s approval in June.

The interim budget projections, which offer a snapshot of the school district’s budget through January 31 and budget projections for the next two school years, don’t include the potential cost of a tentative contract deal with Alameda’s teachers that includes raises, which was reached on February 28.

The projections also don’t factor in as much as $7.4 million in parcel taxes the district collected under the Measure H parcel tax and may be required by a court to pay back.

A state appeals court last week upheld an earlier decision to strike a provision of the tax that required some commercial property owners to pay more than residential property owners and sent the case back to the trial court that first heard it to decide whether refunds are due; the school board voted 4-1 Tuesday to ask the state Supreme Court to hear the case, with Trustee Trish Spencer casting the no vote.

Shemwell said the board will be asked to vote on a plan to set aside money in the event the district is required to pay some or all of the parcel tax money back, something the Alameda County Office of Education, which oversees local districts’ budgeting, says the district must do. Alameda Unified has set aside about $5.8 million – one month’s payroll – in order to cover the district’s bills as state IOUs have grown; that money could be set aside to cover tax refunds if needed, Shemwell said.

District officials are also looking at $1.2 million in cuts that would free up money to be spent on other strategic initiatives, Shemwell said, though it wasn’t clear where the cuts would be made or what the money would pay for instead.

If state funding had proceeded as anticipated, Alameda’s schools would be averaging $6,698 per student this year. Instead, the district is getting $5,206 per student –
$571 less than the district got in 2007-2008 and close to $1,500 less than expected. The gap has by and large been covered by the Measure A parcel tax voters approved in 2011, which is expected to generate about $12 million a year over seven years.

If all goes well, the district and others across the state could see their funding ultimately restored, Shemwell said. State money covers about two-thirds of most school districts’ budgets.

“Basically we’ll have an operational budget that’s solid moving forward,” he said.