Pasadena Unified Grapples with State Budget: “Things Are Not as Bright”

In the first full meeting of the Pasadena Unified School District (PUSD) meeting chaired by newly elected president Kimberly Kenne on Thursday, the PUSD Board, like so many other local and city agencies, grappled with new upcoming budgets as it approached the end of its fiscal year.

PUSD Chief Business Officer Bernadette Griggs presented the May revision of the Governor’s 2016-1017 proposed budget for California schools, one of three budgets the state is currently working through to prepare an approved budget by June 30.

As Kenne explained, “There are currently three budgets in the mix — the senate’s, the assembly’s and the Governor’s.”

The new revised state budget for K-12 schools also reflects the Local Control Funding Formula (LCFF) that overhauled how California funds its K-12 schools. The LCFF was introduced by California Governor Jerry Brown in 2013.

The LCFF provides new decision-making power to local educational agencies to act based on the needs they see for students.

The end of Proposition 30 funding in 2019 looms large in next years’ budget planning as well, and would also mean that lower sales tax revenues will eventually decrease the LCFF funding significantly. The May Revision is built on the assumption of no new revenues, in fact.

However, the November ballot will see a vote on an extension of Prop 30, essentially a tax on higher incomes. Should such an extension be approved by the voters, any school budget deficits would be eliminated.

According to Griggs, “things are not as bright as they were in January,” when the tentative budget was first presented, and the state is beginning to see an economic slowdown. But recent years have also begun with low state revenue projections that improved during the year, she said. However, the latest 2015-2016 estimates show that in May the revenues are projected lower than they were in January. Only 95% of LCFF will be funded in the upcoming budget. There will also be a lower cost of living adjustment (COLA) in the upcoming year. In fact, over the next few years, it is estimated that those adjustments will be in the 1%-2% range.

Griggs also reported, however, that both ongoing and one-time revenues to benefit education grew slightly above the January 2016 forecast.

The state Department of Finance projections also assumes the expiration of Proposition 30 temporary taxes. Gap funding would be reduced by 2% in 2016-17, but raised again in 2018. Grade span adjustments for K-3 funding would also be reduced in 2017, but increased again in 2018.

Classified employees and teachers salary increases, which were both recently re-negotiated for the coming year, would amount to $4,345,778 in 2016, including CalSTRS and PERS employer rate increases. The cost is expected to increase to $4,515,378 in 2017-2018.

Finally, reported Griggs, the state will provide no funding increases for Special Education or funding to address the increased employer contribution to PERS & STRS There will also be no new funding for increased costs in transportation.

The PUSD will hold public hearings on the 2016-1017 budget on June 18, and the state will vote on the adoption of the final budget June 30.