Jan 22, 2004

San Jose Unified faces $7 million budget shortfall
In deciding cutbacks, district’s first priority is student instruction

By Candy Richter
Staff Writer

According to San Jose Unified School District officials, preliminary budget figures released by the state on Jan. 9 indicate that SJUSD still faces an approximately $7 million general operating fund shortfall for the 2004 year.
According to SJUSD Associate Superintendent of Administrative Services Gerald Matranga, most of the additional per student funds the district is slated to receive will go to the state teachers retirement fund and to pay for the current school bonds.
In the proposed budget, the district will receive approximately “$90 more per student towards the general fund,” said Matranga.

Faced with this deficit, SJUSD must once again walk the fine line between maintaining quality instruction for its students and reducing its operating costs. This situation, combined with steadily declining enrollment numbers, has prompted the district to look at school consolidation as a solution to its financial woes.

“Our first priority is to maintain our instructional programs,” said Matranga. “Retaining our sixth period day at the middle school level, and keeping programs like class size, which directly impacts the students. We’re looking to mitigate the need to upset our instructional programs, to stay away from any instructional cuts. Consolidating a school doesn’t affect programs; it’s an operational expense. Because school closures are also demographically driven, even in the best financial times declining enrollment can cause a school to close. And these are definitely not the best financial times for California.”

Matranga explained that each campus receives a certain amount of money per student. This revenue must be balanced against the operational costs of the school itself—things like custodial services, landscaping, energy costs, etc. If the population drops below a set number, it costs the district more to run the school than the revenue the school generates.
By closing the low enrollment schools, SJUSD could save approximately $450,000 per site in operational expenses. This would not include any additional revenues brought in by leasing each property.

In land-strapped Silicon Valley, it makes more sense to lease vacant school properties rather than sell them outright. “I don’t see a major [enrollment] upswing in the foreseeable future,” said Matranga. “But we do want to retain the properties to protect our future needs.”

Matranga stressed that factors such as student transportation expenses and neighborhood impact played an important role in the task force’s evaluation of potential closure sites, and will be a factor in determining the best tenant for the vacant campuses.
“A lot depends on the community and the zoning. Most schools are in residential neighborhoods, and we look at that. There are a number of organizations out there that would be a compatible fit.”

Recovery bond deemed a critical factor
According to Matranga, Proposition 57, Gov. Arnold Schwarzenegger’s $15 billion bond measure that will face voters on the March 2 ballot, is “absolutely critical” to public education funding.

Matranga, like other public education administrators, fears that without the bond revenue, the state will once again turn to education to absorb the deficit. “Without this recovery bond money, all bets are off,” said Matranga. “I believe it would have a negative impact on our public schools.”

Schwarzenegger’s recent comments have included a possible suspension of Proposition 98, which when passed in the late 1980s, guaranteed the state’s public education system a set percentage of the state’s revenues. In lieu of allocating the full percentage to public education, a partial payment would be earmarked for public education with the understanding that the balance owed would be paid back at a later time.
“I think the governor is trying to build in some stability so at least [public education] can plan [their budgets], said Matranga.”

Ironically, even though the state’s budget is not final, school districts are expected to go ahead with their budget planning, knowing that their financial futures are still uncertain.
“You must be as conservative as you can be in program planning,” explained Matranga. “The process gets very difficult. For instance, March 15 is the state’s deadline to give [some employees] layoff notices. In 2002-2003, we had to balance our budget three times, and make aggressive cuts during the year. It was very difficult to do.”