School District May Consider Parcel Tax

A Murrieta Valley Unified School District budget that has been dealt a loss of $139 million in revenue since the beginning of the state budget crisis in 2007 has forced officials to consider other options to keep the district running.

One such option could be a parcel tax, said District Superintendent Stan Scheer following a special board meeting held Thursday, during which Scheer along with school board members were presented a historical and future look at the state of the budget.

The meeting Thursday was the beginning of a series of discussions concerning the 2013-2014 budget, according to Scheer.

"People need to know we are going to be looking at all options," Scheer told Patch. 

"What we are trying to do is talk about how we got here; we still are not done talking about how we got here," he said.

Assistant Superintendent of Business Services Stacy Coleman used a PowerPoint to shed light on the progression that has led to this point--starting with state voter approval of Proposition 98 more than two decades ago.

"Prop 98 was enacted in 1988 to provide a source of adequate and stable resources for education," Coleman said. "...It was supposed to reduce class sizes and put California in the top 10 among states. It was very significant and was really meant to move education forward."

Since then, however, he said there has been "extensive manipulation" of Prop 98 funding that has "distorted" its original purpose.

"The one thing we have struggled with in this economy is stability. We get one number one day, another the next, and another on the third day."

It was in November 2007, he said, when Gov. Arnold Schwarzenegger first announced there was an expected $10 billion shortfall.

Now Gov. Jerry Brown is supporting Proposition 30, an initiative that would increase state sales tax by 25 cents and require high-income earners to pay more in taxes.

If the initiative, which is supported by the California Teachers Association, passes on Nov. 6, it would bring in $6.7 billion a year.

However, Coleman said that in the first year, the governor is proposing to use the money in part to pay off (education) deferrals from 2011-2012. 

"Our funding would remain flat this year," Coleman said.

Additionally, Coleman said the district will receive less revenue this year until the new state funds are released in June 2013. The district in the meantime needs to borrow $55 million to "normalize its cash flow," he said.

"It is costing us $200,000 a year to borrow this money," Coleman said.

To play it safe, he added that the district adopted its budget as if the taxes were not going to pass. The district's 2012-2013 operating budget includes $142.45 million in revenue and $150.34 million in expenditures. 

The gap will be closed by the use of reserve funds, taking the ending fund balance down to $4.1 million, Coleman said—not enough to meet the district's required 3 percent reserve funding.

"This can not be mitigated simply due to further reductions and cuts to expenditures," Coleman said.

District employees, which make up 88 percent of the budget, agreed to an across-the-board 9.66 percent pay cut for this latest fiscal year taken in the way of furlough days.

The last time employees took a raise was in 2007. It was a negotiated 1 percent, according to Coleman.

Though there have been no layoffs since the budget crisis began, Scheer said 30 temporary employees whom are typically brought back each year remained "laid off" for the first time. And when employees have retired, most posts have not been filled.

"Those cubicles we have empty got us until now, that has helped us," Scheer said.

One-time funds under the American Recovery and Reinvestment Act of 2009 were also what helped carry the district as far as it has been able to survive, officials said.

"The community doesn't know what we have done to tighten our belts," said Board Member Margi Wray. "I think it is really important that we are telling people the one-time money is not there...we don't have any more tricks up our sleeves."

Board Member Robin Crist said there needed to be awareness in the community.

"We can't sugarcoat this any more...let's be honest about it," Crist said.

"The urgency now is that the community is going to start feeling the pain..." she said, alluding to more chairs in classrooms this year due to class size increases.

If the district were to propose a parcel tax on residents, Scheer said that decision would not be made until sometime in the spring.

"We don't want to do anything right now until we know what is going to happen in November," Scheer said. "If the tax initiatives pass, we are going to have a $12.5 million haul; if they don't we are looking at (a shortfall of) $22 to $23 million next year."