OUSD budget balanced now, but funding outlook bleak

Oakland’s school board meeting was held on Tuesday, a day earlier than originally scheduled, in order to confirm the first of three required interim budget reports. The district is currently operating on a balanced—though much reduced—budget for the 2010-2011 school year. Citing concerns about the district’s ability to “maintain fiscal solvency,” the superintendent of schools for Alameda County has asked that the Oakland school board submit reports at the end of each quarter, verifying that the district is staying on track with its budget.

“We did submit a balanced budget,” said Troy Flint, the spokesperson for Oakland Unified School District, of the document board members approved Tuesday, “but we’re headed towards potentially the biggest mid-year cuts in the history of California.” Flint said the district is expecting news about mid-year budget cuts at the state level in February. “That’s when we’ll know what the impact of the budget cuts really is,” he said.

Oakland’s school district has had to cut $120 million from its budget for the 2010-2011 school year and more cuts are expected next year for the 2011-2012 fiscal year. The Oakland school district is currently operating on a $550 million budget, $150 million of which district budget planners are planning to bank for the 2011-12 year. This money may also be used to cover shortfalls that result from the expected mid-year cuts.

Nearly two thirds of the money spent this year will cover teacher and staff salaries and employee benefits. “Education is a people business, essentially,” Flint said. “We’re not producing widgets. We have some overhead and supplies but it’s a human capital intensive enterprise.”

Jerry Brown, Oakland’s former mayor and California’s new governor-elect, confirmed on Wednesday that schools should brace for more cuts as he attempts to balance the budget for 2011-2012. Right now the state is facing a $25 billion shortfall in its overall budget.

At a forum in Los Angeles on Wednesday, Brown urged education leaders to “please sit down” when they read his proposed budget to be issued on on January 10, according to The San Francisco Chronicle.  California will spend $49.6 billion on K-12 and community college education this year compared to $56.6 billion last year. Another $2 billion cut from next year’s budget is already scheduled and the cuts Brown warned about will come on top of that.

“We’d already been advised to expect cuts,” Flint said of Brown’s announcement this week. “But it is helpful in telegraphing to the public exactly what’s coming so they better understand the challenges we face.”

Tony Smith, Oakland’s superintendent of schools, has repeatedly called the state cuts “unconscionable” but has also maintained a strict pay-as-you-go policy. “If we can’t pay for it, we can’t have it,” Smith said at a board meeting in August when this year’s cuts were first announced.

This is only the district’s second year of independence from state control; a state takeover of district operations was instated in 2003 when it was discovered that the Oakland Unified School District was financially underwater. State control was lifted in the summer of 2009. Smith has consistently reminded the board and the public that despite complaints about program cuts, eschewing a balanced budget could land the district right back in state control.

The school district’s declining enrollment has also contributed to its need to tighten its belt this year. Since state dollars are distributed based on enrollment, every student the district loses to private or public charter schools or to families moving out of the district means fewer dollars in the budget. The interim report released Tuesday shows an average daily attendance of just over 36,000 students in K-12. That’s down from 55,000 in 2000.

The most drastic budget cuts proposed for Oakland earlier this year were to Early Childhood Education and Adult Education, though the state budget passed in October restored much of this funding. The other major cut has been to staff. Both teachers and district level staff have suffered significant lay-offs; 505 positions were eliminated this year.

To add to the school district’s monetary woes, much of the funding promised by the state has been deferred; in attempting to deal with its own multi-billion dollar deficit, the state has not made on-time payments to school districts. If the deferments continue, the district can expect a $23 million shortfall at the end of this fiscal year according to a presentation at Tuesday’s board meeting by OUSD’s chief financial officer, Vernon Hal.

With more cuts likely, the search for new sources of revenue continues. Smith has talked about forming partnerships with the Oakland business community that would help fund schools. He led a move in this direction as the superintendent of Emeryville public schools from 2004 to 2007.

There has been some success in this effort already. Last month the Kaiser Foundation pledged $10.5 million to support school health centers and African American male achievement. “That was a vote of confidence from one of the biggest names in the business community and we’re confident something else will follow,” Flint said. There are no pending announcements about additional partnerships on the immediate horizon, he said.

The Los Angeles Unified School District announced this week that it is taking the idea of business partnerships a step further by offering stadiums, extra-curricular programs and whole schools for commercial sponsorship. The district has said it won’t allow sponsorships by junk food, tobacco, alcohol and firearms companies, but anything else goes, according to an article in The New York Times yesterday. Flint said there are no current plans to make such a move in Oakland. At this point, the idea has not even been discussed here, he said. Still, he said, “We haven’t ruled anything out.”