CONTRIBUTED BY RANDY PANIETZ, MCUSD SUPERINTENDENT

MCUSD is closing out its books for 2008-09. For MCUSD, like most school districts (SDs) in California, there is a sizeable jump in its ending balance. This is not a windfall or a reversal of fortunes, but rather a result of the timing of the state budget; a few one-time, state-approved accounting changes known as “sweeps” and “flexibility;” the late 2008-09 receipt of State Fiscal Stabilization Funds (SFSF); and required, multi-year fiscal planning.

Timing: In its May Revision of the governor’s draft 2008-09 budget, the state legislature had warned school districts to expect a reduction in revenue limit funding. Revenue limit is the funding model used by the state in which a per-student dollar amount is multiplied by a district’s average daily attendance (ADA). In light of this announcement, MCUSD, like most every other SD, began to scale back and implement cuts to address this anticipated revenue reduction for 2008-09. However, the 2008-09 revised budget was not ultimately passed until August 2009, which was too late to impose the reduction for the 2008-09 school year. As a result, the legislature voted to impose the reductions in the 2009- 10 budget year rather than in 2008-09. In other words, the expected loss of approximately $500,000 for 2008-09 did not materialize in that budget year, but was pushed forward to affect this (2009-10) school year. The result is a revenue limit funding reduction of approximately $465,623 which is the result of an increase to the deficit factor from 17.967 percent to 18.355 percent and a one-time reduction of $250 per ADA for the 2009-10 budget year. Because MCUSD had prudently planned for the reduction in and for 2008-09, the district’s ending balance for that year reflects an inflated amount—it includes revenue limit funds that were not expected to be there. Those funds are not “extra” monies, however. They are needed to fund the 2009-10 school year when the budget is updated at First Interim. The state will implement these reductions by releasing smaller monthly apportionments to MCUSD.

Sweeps and flexibility: At the end of the 2008-09 school year SDs were allowed to sweep the ending balances (unspent money) of many state categorical (restricted) programs and redirect those funds where needed elsewhere. This was done with the expectation that it could help SDs weather the economic crisis for the next several years. Additionally, the state temporarily eliminated more than 40 categorical programs, allowing those monies to be allocated, at the board’s discretion, “for any educational purpose.” The state implemented this as another tool to support fiscal solvency in SDs. MCUSD operates 20 such programs. MCUSD’s Board of Trustees voted to take these steps, and these funds are also reflected in MCUSD’s 2008-09 unrestricted ending balance.

CONTINUED NEXT WEEK