Is Berryessa Facing Bankruptcy?

Yesterday, CBS 5 posted a story on their website about South Bay School Districts that "face bankruptcy."  The story says that "a new state report shows that many school districts in low income areas could be facing bankruptcy, including four in Santa Clara County. The school districts that could be in financial trouble include Berryessa Union, Evergreen Elementary and Ravenswood City." 

The story is based on the second interim report that our district submitted to the County Office of Education in March.  At that time, we admitted that based on current budget projections, and without drastic cuts, our district would go into negative balance in the 2013-2014 budget year.  For that reason, our budget was given what is called a "qualified certification."  The media identifies districts with that designation as having a potential for bankruptcy.

While the story is overly alarmist, it is definitely true that Berryessa School District is faced with a major challenge, should the state tax measures supporting schools fail in the November 2012 election.  We have built into our budget an assumption that the tax measures fail and the Governor's trigger cuts are implemented.  The result would be a cut of nearly $450 per student.  The Governor has proposed giving districts the ability to cut an additional 15 days out of the school year over a two year period if the tax measure fails. 

At our May board meeting last week, we approved our third interim budget report.  We now have a "positive certification" because we demonstrated a theoretical way to balance our budget in the 2013-14 school year.  The submitted interim report included increasing class sizes for kindergarten through third grade to 30 students, and shortening the school year by an additional 10 days (we already have shaved 2 days off of the school year).  Such changes would have to be negotiated with our employee groups, but such drastic action would be necessary if the worst case scenario came to pass.

This year's budget situation is even more unpredictable than in past years.  I attended, along with three district administrators, an informative workshop earlier this week on the California budget and its impact on schools.  The Governor's May revision to his budget provides flat funding for schools, but only if his tax initiative is approved by voters.  That is why we cannot count on the revenue and must plan for the possibility of the large cuts I mentioned above.

We have set aside enough money to make it through the coming school year (2012-13) without any cuts.  We will make it through next year even if the large mid-year cuts occur.  That is why we made the risky but right move to keep the status quo and avoid laying off any district employees.  The following year is where we are facing huge risks.  We hope that the Governor's tax measure will pass and the economy will exhibit growth, so that we can avoid further erosion of the educational services we provide our students.

Strong Support for our Parcel Tax

One lifeline for the Berryessa School District during these years of unprecedented cuts to our state funding has been funds from the Measure W parcel tax that the voters approved in 2008.  About 73% of the voters in our district approved a parcel tax of $79 per parcel that results in funding of $1.7 million each year.  

This money is local and cannot be taken away by the state or any other entity.  It has been used to pay for retaining science and math teachers, keeping our libraries open, and supporting other important district functions.  Since the parcel tax passed, the state has reduced our annual budget by about $9 million.  While the $1.7 million from the parcel tax doesn't come close to bridging that deficit, it does save some key programs from elimination.

Last night, the Board heard the results of a survey of the public's appetite for continuing the parcel tax for an additional 8 years.  No matter how quickly the economy improves, it is clear that there will be a shortfall in education funding for the foreseeable future.  That is why renewal of the parcel tax will be crucial for us to continue to adequately serve the students of Berryessa.

The good news is that 77% of the voters surveyed support renewing the parcel tax at its current level.  Interestingly, only about a quarter of the voters are even aware that we currently have a parcel tax.  That is why it is important to educate the voters on the existence of the parcel tax, and how much we appreciate the support they have given us.  Our district continues to show academic growth at all of our schools.  

If the Board decides to move forward with a parcel tax extension this year, it will appear on the November 2012 Presidential election ballot.  Thank you so much for your support of our local schools.  Berryessa's children appreciate it very much.

Governor Brown's Tax Initiative

The State of California has been struggling with budget deficits for nearly a decade.  Every year, schools and other public services have been cut, hurting the most vulnerable Californians and leaving our children behind.  California now ranks at best 47th out of 50 states in per-pupil funding for education.

The only way out of this downward spiral is to provide more funding for the state's general fund.  An improving economy will help, although it will take many years to get all the revenue back.  In the meantime, it is imperative that California voters pass Governor Brown's temporary revenue initiative that will appear on the November ballot.  The measure would increase state revenue by as much as $9 billion per year through a small increase in the state sales tax (1/4 percent) and increases in income tax rates for incomes over $250,000.  The sales tax increase rates would expire in 4 years and the income tax provision would last 7 years.

At our April meeting, the Berryessa School Board unanimously approved a resolution in support of the initiative, officially called the "Schools and Local Public Safety Protection Act."  This initiative is also endorsed by the California Teachers Association and all our local legislators.

A competing initiative promoted by Molly Munger and supported by PTA would raise more money for education, but would raise income taxes on all California taxpayers.  Polls show that this initiative faces very low support.  While the initiative might sound like a good deal for schools, the first priority should be stabilization of the state budget, which would only occur by approval of the Governor's initiative.  

The big problem with Munger's initiative is that voters are likely to be confused by multiple tax measures, leading to the failure of both.  If that happened, children would suffer and many school districts may even go bankrupt.  It isn't clear how the Berryessa School District will balance our budget going forward if faced with another $400 per student in cuts.

Yesterday's Los Angeles Times summed it up nicely: "It's conceivable that having two tax initiatives on the ballot will help persuade voters that Sacramento really does need more revenue after years of budget cuts, and a majority of them will rally behind one or the other. But it's far more likely that the dueling campaigns will split support for a tax increase, sending both to defeat and causing more deep cuts to the very schools Munger aims to protect. Brown's proposal is a better fit for the state's needs today."

It is very important that everyone who cares about public education in California get behind the Governor's initiative so we can present a unified message to the voters.  Let's stop the bleeding.  Then in future years we can and should find ways to increase schools' revenue streams.