State funding will be more than expected, school trustees
told
“No more cuts,” at least for now, is the word from Morgan Hill School District Deputy Superintendent Bonnie Tognazzini, head of business services, to trustees at Monday night’s meeting.
Thanks to Gov. Arnold Schwarzenegger , the cash-strapped district will not be forced to make the remaining $900,000 in cuts to its 2004-2005 school year budget, the bulk of its estimated $1.6 million in cuts for next year.
The district’s current budget is $53 million. School Board trustees have previously made cuts of $891,000 for next year based on the projected shortfall.
A budget committee was convened by the district for three days of meetings in early April, resulting in a “consensus” list, a “majority” list, a “negotiable” list and an “optional” list of cuts. The committee consisted of representatives from the district’s three unions – teachers’, classified employees’ and administrators’ – and Superintendent Carolyn McKennan, Tognazzini and Assistant Superintendents Denise Tate and Claudette Beaty.
Since the budgeting process began, in early April, trustees have voted to cut $255,000 in a District Office restructuring move; $106,000 in a consolidation of education administration; $45,000 in travel and conferences; $14,000 in custodial carryover; $390,000 in a recapture of categorical funds; $56,000 in classified employee hours, days and layoffs; and $25,000 in technology reduction.
“The news (from the governor’s May revise of the state budget) is better than we could have hoped for,” Tognazzini told trustees Monday night. “What has happened is the state has made up the ($900,000) difference for you … This takes you off the hot seat.”
Tognazzini told trustees the governor’s proposed budget would give the district a zero balance for next year.
“You are solvent for next year,” she said.
The reason for the reversal comes mainly in the form of a $915,276 COLA, or cost of living adjustment, deficit reduction, she said.
“It is anticipated there will be full funding of a 2.41 percent cost of living adjustment across all programs,” she said. “This is an increase from the 1.84 percent projected in January. Also, school districts receive about 97 cents on the dollar for the entitlement of state funding; it is anticipated we will now receive 97.9 percent cents on the dollar. These two increases provide for an additional $1,255,276 of revenue in the 2004-2005 school year.”
There may be more good news down the road, Tognazzini said. In what she described as a controversial action, legislators are considering equalization funding for state school districts. The purpose of the funding is to bring all districts in line with one another on a per pupil, or Average Daily Attendance (ADA) basis.
“Morgan Hill could be in line for as much as $26 (more) per ADA, or $220,000,” she told trustees. “The average rate is set for about $18 per ADA, contributing another $144,000 for the unrestricted general fund.”
However, because the funding is still being debated, Tognazzini said, she did not include the amount in her budget calculations.
More revenue, which also is not included because decisions are still being made, is possible in the form of funding for instructional supplies. The governor has proposed an additional $100 million statewide, increasing the original $175 million to $275 million. At this time, however, it is not clear how much would be allotted each district or ADA. Tognazzini said the amount should be known by the time the district builds its first interim budget in October.
The district could also benefit from an anticipated increase in funding for deferred maintenance, up $107 million from $77 million to $184 million statewide. Districts must match state contributions. Morgan Hill has already included $300,000 for this account in next year’s budget, Tognazzini said, but if the state does not fund the entire $300,000, the difference from the district’s contribution will be allowed to flow back into the general fund.
The general fund will also benefit from an additional $97,000 in funding for worker’s compensation.
Tognazzini told trustees if “extra” money is available, they will have to prioritize which cuts to rescind and how to spend the dollars.
Morgan Hill Federation of Teachers President Donna Foster said she was very glad to hear Tognazzini’s report.
“We are encouraged and pleased to see Bonnie’s report,” she said. “I would like to remind you that you need to bargain in good faith. We need an articulated process for rescinding cuts … The whole process of budget building didn’t just happen for no reason. You have to be fiscally conservative … Don’t spend it before we negotiate.”
There have been several hot button issues in the process, including the cut to classified workers, who have been hit for three years in a row; the proposed cut of two part-time nursing positions, which would leave the district with only one full-time nurse, the possible cut of the Associated Student Body (ASB) clerk at Live Oak High and the possible cut of the elementary music program.
Only the classified positions took a hit in this round of cuts. Cutting the elementary music program would cut $120,000 from the budget. The program serves all fourth through sixth graders, with fourth graders studying general music while fifth and sixth graders may choose between chorus and band. Last year, when the program needed $28,000 to continue or be cut, district booster clubs chipped in to keep the program alive. The Live Oak Emerald Regime boosters donated $18,000, while Britton and Martin Murphy Middle boosters contributed $5,000 each. The district has cut a total of more than $6 million from the budget in the past two years.
Reasons for the shortfall include unfunded state mandates, unanticipated expenses in special education, a decrease in ADA, or Average Daily Attendance, funding and the need to replenish the state-required reserve from the current 1.7 percent of the general fund to 3 percent.
Tognazzini also cleared up a misunderstanding about district administrators’ bonuses. In an article that ran in Friday’s edition of The Times, it was reported that Tognazzini said four administrators in the district receive annual bonuses based on longevity. She also said all district employees receive longevity incentives, but these four – the superintendent and herself and two assistant superintendents – were the only ones to receive bonuses in this form.
There are 17 administrators on the district’s “longevity worksheet, including directors and principals, and although the top four are the only ones to receive cumulative bonuses, i.e, Superintendent Carolyn McKennan receives $5,000 per year, so in this her seventh year, she received $35,000, all of them receive an annual bonus on top of their salary.
A note on the worksheet states: “Administrators hired after July 1, 1998 will have the following benefits: longevity will be 2.5 percent of current salary at step 10, 15, 20 and 25 and health and welfare up to $4,830 yearly. A career increment equivalent to three percent of the prior year’s elementary principal step 1, column 1 salary will be earned in the 7th, 11th, 15th, 19th, 23 and 27th year of administrative service in the district for administrators hired prior to July 1, 1998 and $3,960 yearly towards health and welfare.”
