Friday, July 25, 2014

School budget: the good news and the bad news

School budgets usually include a mixture of “good news” and “bad news” and this year's spending plan for an anticipated 25,459 students at 35 campuses in the Placentia-Yorba Linda Unified School District again exhibits both elements.

First, the good news: for the first time since 2007, the district will receive an increase in state funding for the 2014-15 fiscal year that began July 1. Income is expected to jump to a bit above $212 million from close to $207 million last year.

Revenue under California's two-year-old Local Control Funding Formula will be nearly 9 per-cent more than last year, while smaller sums from federal, other state and local sources will drop about 1, 22 and 52 percent, respectively, leaving an overall 2.6 percent increase.

Next, the bad news: expenditures also will grow, from just over $209 million last year to more than $216 million this year, related to salary and benefit increases, as capital outlay drops 69 percent and books and supply costs 16 percent for an overall 3.3 percent increase.

The revenue-expenditure gap will be erased by reducing a reserve fund built up during better financial times to about $8.8 million. Earlier projections indicated the state-mandated reserve fund will grow again soon, especially if state funding increases through 2020-21, as promised.

Here are some other good-bad news aspects of the 131-page budget document approved 5-0 by the district's elected trustees at last month's meeting:

--Teachers, counselors and administrators can expect a 2 percent salary increase starting July 1 and 1 percent beginning Feb. 1 over the 2007-08 salary schedule and continuation of step and column increases for years working and education levels. The health and welfare premium for active employees is $17,393.

--Costs for special education services mandated by federal and state regulations continue to outpace funds provided by the agencies, with this year's expenses for 2,961 students pegged at $36.8 million, $17 million more than federal and state income. Per-student underfunding stands at $5,770, up $220 from last year.

--State funding for transportation is nearly $1.5 million and the district raises $80,000 with a $2.20 per-day student fee, which nearly covers the $1.6 million home-to-school costs, but a $4.6 million expense for special education transportation mostly comes from general funds.

--The Local Control Funding Formula allows supplemental dollars for students eligible for free and reduced price meals, English learners and foster youth, totaling $5.8 million, for nearly 37 percent of the district's students.

--Funds from the sale of state lottery tickets will bring in $156 per average daily attendance this year. The use of $126 is unrestricted, while at least $30 must be used for instructional materials and textbooks, for a total of about $4 million.

--A modest decline of 65 is projected in average daily attendance this school year, from last year's 25,524 to 25,459. Recent high school enrollment: El Camino 214; Yorba Linda 1,750; Esperanza 1,853; El Dorado 1,922; Valencia 2,690.

--Costs to fund the State Teachers Retirement System and the Public Employees Retirement System are increasing, with the district cost rising from 8.25 to 12.43 percent of payroll by 2016-17 for STRS and from 11.44 to 15 percent for PERS. Employee costs also are up.