Around California - SCHOOL DISTRICTS BRACE FOR BUDGET WOES: Officials already taking cost-saving measures

By Jennifer Kabbany - for The Californian (SW Riverside County)

January 7, 2008 - In light of an estimated $14 billion statewide deficit and talk in Sacramento of midyear budget cuts to education, Southwest County school district officials said they are bracing for tight and troubling fiscal times ahead.

Local officials said they have already taken a variety of cost-saving measures because of the looming budget woes, including unofficial hiring freezes and spending slow downs, among other efforts.

At least one local agency, the Lake Elsinore Unified School District, is already predicting the possibility that it might have to cut millions of dollars to balance its budget for the year beginning July 1, 2008.

And financial officials with each district said that in times such as these, employee layoffs are never completely off the table. District administrators said that later this month, when Gov. Arnold Schwarzenegger releases his proposed budget for the upcoming fiscal year, they should know more about where they stand.

In the meantime, they said, they are taking the advice of the California Association of School Business Officials to "plan, not panic."

"There is a lot of uncertainty," said Jeff Okun, assistant superintendent of business support services for the Temecula Valley Unified School District, which has stopped hiring except for so-called essential positions.

District officials there have also asked principals to be frugal with their campus supply budgets so that they can possibly roll over any balances to next year.

"They have been put on notice that next year could be a tough year," Okun said.

School districts typically operate on very thin margins, with expenses meeting or exceeding revenues. Other than cash reserves, there usually is not a lot of leftover money to soften the blow of state budget cuts. Because of that, spending reductions at the district level can mean pink slips, as about 85 percent of a district's money is tied up in salaries and benefits.

Darrin Watters, Lake Elsinore's assistant superintendent of business and support services, recently painted a grim budget picture for trustees that included a warning that layoffs could be in the offing.

Watters said that if the state's financial woes turn out to be as bad as they sound, the district could be looking at as much as $6.2 million in budget cuts.

Making matters worse for local districts, new student enrollment has come to a standstill, officials said. Because each new student represents thousands of new dollars to a district, seeing that growth basically come to a trickle or stop altogether has hurt their bottom lines, they said.

The Murrieta Valley Unified School District, for example, has had zero growth so far this year, said Superintendent Stan Scheer. To compensate for that, as well as to plan for tough times ahead, the district has enacted a number of measures, he said.

For one, the district only offered its teachers a 2 percent raise this year, he said.

"We have already been slowing things down, slowing down our spending," Scheer said. "The biggest ticket item is salaries and benefits, and we have slowed that down in terms of the offer on the table."

The teachers union accepted the offer last month.

Scheer said officials also are evaluating each open position to determine whether to hire a new employee or find a way to consolidate some duties. Also, for the first time, the district is investigating the possibility of an early retirement incentive program, he said.

Moreover, the district decided to hold off on opening a middle school in French Valley next year, in part to save money on administrative salaries, he said.

In the Menifee Union School District, officials are taking similar measures. The district is only hiring essential positions and eyeing its spending very carefully, said Dan Wood, assistant superintendent for business services.

He said budget cuts could be on the table, but he doesn't know for sure yet.

"There is always a chance, but at this point we don't have any official information," Wood said. "We have a lot of speculation, and it's always best to plan for the worst."