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Mammoth School District focuses on fiscal future

  • by Andy Geisel
  • in Arts and Life · News
  • — 2 Jul, 2012

With the latest budget advisories from Interim Finance Director Michele McClowry in front of them and a recent School Services of California report forecasting a slow economic recovery for the state, Mammoth Unified School District’s Board of Education adopted its 2012-2013 operating budget on June 28.

As previously reported, the Board is facing tough choices when it comes to offsetting both a projected decline in Mono County property tax revenue, and potential slashes in subsidies from the state. If a tax initiative package, put forth by Governor Jerry Brown and going before state voters in November, is not approved a raft of steep cuts awaits education line items in Sacramento that will have far-reaching impacts.

MUSD’s budget had to be approved by June 30, as required by law. The budget as it sits now, moved forward with projections of budget deficits and radically declining reserve percentages over a three-year period. McClowry said that so far the Mono County Office of Education has generally approved the budget. However, per a letter from MCOE, the Board needs to submit a plan to the County on how it will “address the bleed out,” as McClowry put it, and “earn acceptance for its multi-year projections” by Aug. 1.

Translation: no summer vacation for the BOE. Usually dark during July, MUSD Superintendent Rich Boccia called a special meeting for July 19 to begin work on revising the three-year shortfalls. McClowry strongly urged the Board to act soon on the problem, pointing out that if left unattended MUSD faces insolvency potentially by the 2014-2015 school year.

A UCLA forecast sent to School Services said that, while a double-dip recession isn’t foreseeable in the near term, “a subpar growth rate, largely attributed to an overbuilt housing market, which is still dragging down growth … will do little to push down the unemployment rate.” That in turn, the report, went on to say, means the state isn’t likely to reach the pre-recession employment peak of 15.2 million until 2015, and even then unemployment is still forecast to be around 7.2%.

In the short term, critics of Brown’s tax initiatives, which both boost the state sales tax and taxes on higher income earners, charge they would only keep the state’s budget deficit at the waterline, no higher, and do nothing to address huge spending, pension and entitlement messes.

Boccia told The Sheet he’s worried about passage of the tax plan, and fears it might be voted down. McClowry added that, based on revised figures from the state, an original forecast cut of $441 per student ADA has now been raised to $457, representing an extra hit of $16,800 to MUSD if the tax package isn’t passed.

McClowry pitched an idea to the Board to consider changing its internal reserve requirement from 17% to 10%, which he said might make things more palatable. She also mentioned the way the County makes its property tax payments could be problem for the District going forward. MUSD gets its tax revenue in June, but the County backdates the payments to April to avoid getting hit with late fees and interest. That she said, could impact payroll prior to June in more challenging economic years, and should be taken up with the County to arrive at a solution before it becomes a major issue.

McClowry also cited several key problems for the Board to put on its radar. “Healthcare alone is going to kill you, especially if the [federal] Affordable Care Act ends up costing more than originally projected,” she stated. “Your deficit spending is still phenomenally bad, right now at about $500,000 of a $12 million budget, but that’s going to only increase over time.” Class Size Reduction is also bad statewide, she pointed out. “Some school districts are sending in waiver requests for as many as 35-38 kids per class.”

Board member Greg Newbry took issue on principle with the budget’s spending forecasts as they currently exist. “If I wanted to buy a car, but knew I wouldn’t be able to make payments after six months, would I buy it? Probably not,” he posited. Newbry said he was grateful of the time and effort put into the spending plan, but had problems with passing a document that had such deficit projections still in place, casting the lone dissenting vote.

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Topics: mammothNewssheet

— Andy Geisel

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