Schools’ ‘fair share’ continues
While the passage of Proposition 30 last month means the Sonoma Valley Unified School District won’t have to make the almost $1.8 million in cuts projected had the measure failed to pass, it retains the status quo and means the district will have to continue paying Sacramento its “fair share.”
That means the district will have to cut a check for almost $2.83 million this fiscal year and an estimated $2.63 million in fiscal year 2013-14 and again in 2014-15. The money is levied from so-called basic aid districts where revenue is not calculated on the basis of average daily attendance.
Proposition 30 was Gov. Jerry’s Brown’s school tax initiative that hikes taxes on those people earning more than $250,000 a year, for seven years, and increases the state sales tax by one-quarter of a percent for four years. It is estimated that the tax increases will raise $6 billion annually for the state budget.
At Tuesday night’s school board meeting, Deputy Superintendent Justin Frese told the board the good news was that the passage of Proposition 30 spared the district from making more cuts. The district cut more than $2.5 million earlier this year – cuts that included eight furlough days for all district employees. But the state measure didn’t include any new money, it just kept the status quo.
Frese told the board that while the county advised the district to count on less than 1 percent increase in property taxes this year, Frese was budgeting a 2 percent property tax hike for this and the next two fiscal years. “Last year, they told us it would be zero and it came in at 1.9 percent,” he said. “The Valley is doing better than the rest of the county.”
He said a 1 percent hike would mean about $250,000.
Frese said the district could receive some money from the former redevelopment agencies – somewhere in the neighborhood of $300,000 from the City of Sonoma and another $200,000 to $300,000 from the Springs. But he said the redevelopment money would be one-time money.
“There’s a chance we could get redevelopment money, but it won’t be a windfall,” he said.
There’s also a chance that if the state raises more than $6 billion a year from Proposition 30, it could start backfilling the money it has shorted schools in the past few years. Right now, the state is paying revenue limit districts 80 cents on the dollar of what they are supposed to be getting.
Sonoma, as a basic aid district, gets most of its revenue from local taxes. Revenue limit districts receive revenues from the state that backfill the difference between local taxes and state limits.
Since the state can’t cut Sonoma’s money, it’s making Sonoma and other basic aid district pay a kickback, or “fair share” as the state prefers to call it. In the past three years, Sonoma has paid more than $5.2 million as its “fair share,” and if things don’t change, it’ll cost the district another $8-plus-million over the next three years.
The district has more than $6.5 million in various funds, including more than $2.9 million in its deferred maintenance fund. Boardmember Helen Marsh asked rhetorically, “If we spend deferred maintenance on salaries, we don’t have money for a new roof if we need one.” And Frese agreed.
“I hesitate to make a long-term plan with deferred maintenance money,” he added.
The district will be deficit-spending the next two years – but the eight furlough days could play into the deficits. In 2013-14, the projected deficit is almost $1.4 million, but if the eight furlough days are continued, the deficit would be just $430,000. In 2014-15, the projected deficit would be $1.7 million, but again, with eight furlough days in the equation, the deficit would be about $764,000.
But the furlough days are something the district would have to bargain for with employees – it couldn’t unilaterally add in eight furlough days.
“We need to make systemic reductions or identify new revenue sources,” Frese said.
Marsh asked if the district should spend the money on reducing furlough days or on reducing cuts next fiscal year.
She pointed out that that the last time the district asked for a parcel tax, it received a ‘yes’ vote of about 60 percent – and lost because it didn’t receive the required supermajority of 66.6 percent. Marsh said there’s talk the Democrats in Sacramento might try to change the threshold for parcel tax elections to 55 percent.
“We could make a compelling argument – eight days of school, yes or no,” she said.
The board will again look at finances in January after the governor releases his budget for the next fiscal year.