Superintendent's Budget Message

March 10, 2008

Dear Poway Unified School Community,

Governor Schwarzenegger’s January budget proposal requires dramatic funding reductions for K-12 education. For a state that already ranks low in per-pupil spending, the challenges will become even greater. In a recently published Education Week report, California ranked 46th in per-pupil spending, a full $1,892 per student below the national average, adjusted for regional cost of living. California receives $5,137 less per pupil than New York and $5,171 less than New Jersey. In addition, Poway is considered a “low wealth district,” which means it receives even less than the California average. If we were funded at the national average, our district would receive approximately $66 million in additional revenue annually.

The Governor’s budget proposal for 2008-09 sets out a $14.4 billion shortfall for the entire state. The Governor then declared a state of fiscal emergency, which will result in $507 million in funding reversions from K-12 education this year. However, I am most deeply disappointed in the Governor’s proposal for the 2008-09 school year, which calls for a reduction of $4.4 billion to K-12 education. For Poway Unified, the proposal will translate into significantly fewer state dollars than received in the current school year. The budget problem is magnified by regular ongoing increases to costs, including health and welfare, step and column, energy, and special education funding requirements, to name just a few.

Based upon the Governor’s January proposed budget and these unavoidable increased costs, we anticipate needing to make approximately $15.5 million in budget reductions for the 2008-09 school year, from a total budget of $260 million.

This is a staggering number and represents one of the largest budget cuts since the passage of Proposition 13 in 1978. It is further compounded by the major cuts that occurred during the 2001-02, 2002-03, and 2003-04 school years due to state budget reductions. We have not recovered full funding from the earlier state cuts to offset these new reductions. In effect, this is the second major blow to education funding in seven years, and it cuts deeper than the reductions from 2001 to 2004.

Next Steps at the State Level
In May, the Governor will present an updated budget proposal referred to as the “May Revise.” Based upon California’s Legislative Analyst’s Office report on the economic trend line, the budget picture will likely be even bleaker in May. Therefore, as we are developing budgets and planning for the next school year, we cannot count on the financial picture improving.

We are deeply concerned about this scenario, and as a district will pursue every avenue at the state level to increase revenue and mitigate the impact by making K-12 education funding a higher priority. The Governor’s proposed reductions would deeply undermine our efforts to provide the very best possible education for our students and increase achievement for all.

Next Steps at the District Level
By California Education Code statute, we are required to prepare a balanced budget for the upcoming year and the two following school years. Given that 86% of our budget is invested in people, these reductions will take a deep toll on individual lives and impact our school system across all levels of the district. Due to the state budget shortfall, we will need to reduce teachers (increasing class sizes), management and classified positions (reducing support services), and the overall operations budget of the district.

By California Education Code, we must notify any probationary or permanent certificated employee by March 15 if they may not have a position for the following school year. Certificated employees who receive this notice may or may not be back with us in the fall, depending upon the state budget picture, retirements, leave of absence requests, and other factors.

For classified employees, the California Education Code requires a 45-day notification prior to a layoff or reduction. This process is closely governed by the seniority system. Later this year, the district will send notices to classified employees in areas that may be reduced or eliminated. Again, as the budget picture crystallizes and as retirements and leaves become known, we will hopefully be able to rehire laid-off or reduced staff.

We are committed to retaining as many of our hard-working and dedicated staff members as possible. Adjustments will likely need to be made in our staffing and programs well into August and September depending upon when the state adopts the final 2008-2009 budget.

One program that will not be affected by the state budget cuts is our Building for Success program. Thanks to the recent passage of Proposition C, construction will continue at schools throughout the district. In addition, new schools are being built in the newer developments in our district with funds generated through Mello-Roos fees. The money for these capital projects is completely separate from the general fund budget. The general fund budget pays for teachers, books and supplies, and instructional programs. Facilities funds cannot be spent for general fund expenditures.

On a personal note, it deeply saddens me to see the fabric of this special place for students and staff pulled apart. These are going to be very difficult times with many hard choices. Through it all, we need to be supportive and caring of one another and continue to work together to help our students succeed.

I’m confident that if any group of people can weather the tsunami brought on by the state budget crisis, it is our school district.

Sincerely,


Don Phillips
Superintendent