School funding hard to budget

As students head back to school this week and next, Fallbrook and Bonsall district superintendents await approval of the $102.8 billion California state budget, which includes $66.3 billion for K-12 education programs. On August 13, the state budget was more than six weeks overdue, held up by the Senate Republican Caucus. Without state senate approval, funding grinds to a halt.

School districts don’t have the leeway to delay approval of their budgets past July 1. “It’s the law,” says Wayne Jones, assistant superintendent at Bonsall. Not so with the state. Their previous record for holding out was September 5, says Craig DeLuz, capitol director for Senator Kevin Jeffries in Sacramento.

DeLuz says, “Nothing is going to be done until [legislators] come back on August 20, but the senators are ‘highly motivated to resolve this.’” Meanwhile, the Fallbrook and Bonsall districts have their budgets completed and each reflects a shortfall.

The Fallbrook Union Elementary School District total expenditures is the largest at $35,653,402, but with revenues projected at $34,810,433, it will operate with a shortfall of $842,969. Fallbrook Union High School District is projecting total expenditures of $28,616,738 and revenues at $28,279,292, which reflects a deficit of $337,446. The Bonsall Union School District budget projects expenditures of $13,799,056 and revenues of $13,723,576, with a $75,480 shortfall.

Declining enrollment affects budgets

School districts base their budgets on prior expenditures and future needs; it’s a balancing dilemma all districts face. Regardless how shrewdly administrators figure costs, enrollment numbers impact budgets the most.

Each California school receives state funding per student based on its prior year Average Daily Attendance (ADA). For example, the Bonsall district projects $5,296.48 per student times the enrollment to determine the largest share of its budget.

During the current year, attendance records go to the state at regular intervals and the district’s funding is adjusted accordingly. If a district’s enrollment declines, which is occurring for the fourth straight year in the greater Fallbrook area schools, ADA funding is reduced.

Reductions in ADA funding also occur when students expected to enroll don’t show up for school. If a student doesn’t enroll or return to school for a month after school starts, or fails to return to school immediately after Christmas break, funding for that student’s school is reduced. In the long run, this means fewer resources for students.

Still, fewer students enrolled overall have the greatest impact. For example, in the 2003-2004 school year the average daily attendance for the Fallbrook elementary district was 5,790 students. The 2007-2008 attendance is projected at 5,411 students.

Local schools are not alone. “Over 50 percent of the school districts in the state are in decline,” says Rachel Ehlers, reporting on a downward trend that started in 2004 and will continue through 2009-2010. Ehlers is a senior fiscal and policy analyst at the California Legislative Analyst’s Office.

Sources for school district funds

Funding for K-12 districts flows to each district differently but each school budget includes state, federal and local funds. State funds are the greatest amount.

According to Ed-Data, a California Department of Education resource, 61 percent of state funding for school districts is comprised of business, corporate and personal income taxes, sales taxes and a few special taxes. Local property taxes account for 21 percent, followed by 11 percent of funds from the federal government.

Local revenues such as construction fees, cafeteria sales and use of facilities fees by local school districts make up six percent. Such is the case with the Fallbrook High school district, which rents its Performing Arts Center and leases space to Palomar College.

The California Lottery provides 1.5 percent, or about $125 per student.

Approximately two-thirds of a district’s total funding for operations are “general purpose” or “revenue limit” funds based on the district’s ADA, over which local districts have control. Federal Impact Aide that benefits districts with enrollments of children of military families or Native Americans also flows to districts that qualify, as do Fallbrook and Bonsall. Like general purpose funding, Impact Aide carries no use restrictions.

Categorical aid funding is the other large income portion. It comes from the state and federal governments and may be used only for programs that benefit students with disabilities or that reflect the characteristics of the district, such as low-income families. One example is Title 1 federal funding, which supports No Child Left Behind legislation. Both Fallbrook districts and Bonsall receive funds from this source.

Block grants from various sources also provide funding for special purposes. For example, the Fallbrook Elementary School District has a school site discretionary block grant to purchase materials and supplies for each of its schools.

Depending on the enrollment, the amount can vary but must be used according to state or federal guidelines depending on where the program originated. The smallest funding increment, such as lottery money, has few spending limitations.

As Ed Data reports, “These proportions, which are from the 2006-07 budget, vary slightly one year to the next. For example, the federal government’s share increased from about 8% in 1996-97 to 13% in 2004-05 and then dropped to 11% in 2006-07.” Public schools have no other revenue sources.

Shortfall management choices differ

To compensate for its drop in ADA, the Fallbrook Union Elementary School District reduced their staff by four teachers, says Superintendent Janice Schultz in a report to the district’s governing board June 27. The Bonsall district offset their loss in ADA by consolidating bus stops, thereby reducing transportation costs; by restructuring two classified positions into one; and by shifting responsibilities in their substitute teaching staff. The Fallbrook High School District elected to transfer one-time monies from their reserve account to make up their deficit.

However, even when some expenses can be shifted, or cut, others cannot. For example, if a class size is reduced to 25 students from 30, resulting in a loss of ADA for five students, the fixed costs – electricity to light the room, daily maintenance and carpet cleaning, even bus transportation for a field trip – remain the same.

In the face of budget deficits, particularly as they relate to loss of teachers or services, parents often question why facility construction projects go forward. All three of these districts currently have capital improvements underway. Districts so involved refer to monies in these categories as Capital Funds.

Bonds, like Proposition X for the Fallbrook elementary district, developer fees, state bonds and, in some cases, deferred maintenance funds typically provide these resources. Fallbrook Union Elementary School District is completing modernization of schools throughout its district and building the gym and renovating the quad at Potter Junior High School. The Bonsall district is building a new school site and Fallbrook High School will have its new football field and track completed for the start of school and, later, a new district office complex that will also house a program for independent study and a special education transition class.

With declining enrollments, the rising prices of services and materials and the costs of living and employment, satisfying the needs and wants of students, parents and teachers is complex and not always an enjoyable job. Still, assistant superintendents Chet Gannett of the Fallbrook High school district, Jim Whitlock of the Fallbrook elementary school district and Wayne Jones of the Bonsall district manage to carry on with consummate professionalism.

Detailed budget information is available at each district office.