High school district's financial outlook grim

Anthony buyout takes almost half of financial reserves

The contract buyout of Fallbrook Union High School District Superintendent Tom Anthony by the union-supported board majority (O’Connor, Schulte and Steffler) will reduce the district’s $875,949 special reserves budget by nearly $400,000, leaving approximately half for other designations between now and June 30.

At a time when California school districts face falling enrollment, thereby reducing state and federal school funding, depletion of school budgets for any reason that doesn’t benefit students merits concern.

For example, last July the special reserves budget balance was $1,883,949, from which the district paid for badly needed one-time repairs to high school facilities. By further depleting the special reserves budget to pay off Anthony, decisions on how to spend the balance by the end of the fiscal year will be scrutinized carefully.

At each monthly board meeting, Chet Gannett, assistant superintendent of business services, addresses the district budget in great detail. This year that is particularly critical because the budget was adopted with a shortfall and continues to be fraught with unexpected reductions in revenue caused by dropping enrollment.

Declining student enrollment attributed to inflated home prices and tightening credit continues to drive young families from housing that feeds the Fallbrook school districts, says Gannett. These two aspects of California’s economy hit school budgets the hardest.

Because Fallbrook’s public school funding flows from federal and state sources and developer fees, when the economy is in crisis, as it is in California, the 2007-2008 financial future of its schools is bleak.

An example of a reduction is developer fee revenue. Currently budgeted at $763,050, only 26 percent of that has been collected due to a construction slowdown.

Gannett says he forecasts the district’s finances three years out, using the California Basic Educational Data System (CBEDS) enrollment figures from the middle schools that feed Fallbrook High School.

CBEDS is a single annual collection of data in October from county offices of education and school districts.

Now facing year two of a decline not expected to stop until 2010, Gannett says there were 60 fewer seventh-graders this year.

Dr. Janice Schultz, superintendent of the Fallbrook Union Elementary School District, reports that her district has had an “unexpectedly large drop” in enrollment. The elementary school district expected enrollment to be down by 140 students, but the CBEDS count shows a drop of 206 students over last year, says Schultz.

Even with Proposition 98 (passed by voters in 1988), which provides about 75 percent of the funds that K-14 education receives, it’s based on state and property tax revenue tied to the health of the state’s economy.

Gannett says the legislature is now facing a $10 billion to $14 billion deficit across the board. It will be mid-January before he and other educators know just how grim the future of their budgets will be.