Budget outlook changes for Las Virgenes

The Las Virgenes Unified School District Board of Education approved its 45day budget revision under a cloud of economic uncertainty.

"In 27 years working in school finance this is the first time we've ever had to do a 45-day revise (as early as) October," said Superintendent Donald Zimring. "I think it speaks to the general meltdown of our state's fiscal structure separate of and apart from what's happening nationally."

Zimring said budget promises made by the state today could change —"to the point that we are anticipating what we're presenting tonight may have materially changed by tomorrow afternoon."

Chief business official Karen Kimmel said the state hasn't been fiscally responsible.

"In the good years they're overspending and making longterm commitments; in the bad years they're sort of piecemealing a budget together," Kimmel said. "And with that there is a lot of hope for new revenues that don't really exist."

In January 2008 Gov. Schwarzenegger suspended Proposition 98, a constitutional guarantee for minimum education funding. The suspension amounted to $4 billion in cuts for California school districts, she said. While the governor withdrew the suspension of Prop. 98 during May's budget revision, schools still lost $3 billion statewide.

The current state budget represents a cut of $2.5 billion.

"Every one of these budgets is balanced using assumptions for revenues that do not yet exist," Kimmel said. "Hope is not a plan."

Shoring up tax loopholes, slashing school budgets and using onetime funds to bridge deficiencies are short term solutions only, according to Kimmel. Securing lottery revenues and shoring up the state's "budget stabilization fund" are better suited for the long run.

In the Las Virgenes district, the board's action to either save money or generate new funds yielded $2.1 million, which still represented a shortfall of $1 million.

One-time funds will help the district balance this year's budget, but Kimmel said some of those funds will not be available until next year.

In addition to the Las Virgenes Educational Foundation's recent donation of $135,000, the district will borrow $266,000 from its Parcel Tax Reserve Fund.

Low reserves

When the state adopted its budget, the Las Virgenes reserve, or emergency fund, had dropped to $315,000. At the 45-day revise, the balance was back up to nearly $3.2 million.

With so much uncertainty about the future, officials aren't sure whether the reserves will hold out.

Kimmel estimated reserves will drop to 3.23 percent by next year with continued declining enrollment and no cost of living adjustment. Reserves will be chipped away in subsequent years and may drop to dangerously low levels— 2.8 percent in 201011; 1.35 percent in 2011-12; and possibly down to 0.67 percent by the 201213 school year.

To maintain a required 3 percent reserve level next year, the district will likely have to shave off another $500,000 in spending, Kimmel warned.

Uncertain future

Kimmel said the newly passed state budget is already springing leaks. The governor, Assembly speaker, Assembly minority leader, Senate president and Senate minority leader met on Oct. 8 to discuss reopening the budget due to the national credit meltdown, the sluggish economy and the slow housing market.

The school district, meanwhile, is bracing for mid-year cuts.

Zimring said the district has "pared back" and is running as efficiently as possible.

Board member Terilyn Finders wants to investigate the possibility of offering online classes to raise the school district's student body count, which would bring in more funding.

School board member Gordon Whitehead said the state is in a "world of hurt" and expected the budget news only to get worse.

Kimmel said in Sacramento, "everything is on the table."