Office of the Superintendent
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LETTER TO STAFF, PARENTS & COMMUNITY (28-Feb-2003)

TO: Board of Trustees, Staff & Community
FROM: BILL LEVINSON
DATE: February 28, 2003
SUBJECT: Fiscal Update

FISCAL CRISIS UPDATE: No official action has taken place in Sacramento since the Board’s last meeting on February 25. However, there has been some positive movement on the political side.

Current 2002-2003 School Year: The Governor and legislature remain deadlocked. The impact of the recall effort is as yet unknown. The unofficial deadline for making cuts to this year’s State budget is March 31. The key obstacles for approval are the legal issues surrounding the implementation of the Vehicle License Fee restoration (to the previous 2% of the value of a vehicle — currently .65%). Reminder: If the cuts aren’t made this year, more expenditure reductions will be needed next year.

2003-2004 Budget Year Proposals: There is still no official movement in Sacramento on the basic aid related issues — the loss of the $120 per student basic aid allocation and the recapture of local property tax revenues in excess of a district’s revenue limit remain in play. If these provisions are implemented next year, the District will lose about $7.0 million in revenues, resulting in a projected budget deficit of $6.6 million.

Complicating matters further, is a proposal by the non-partisan Legislative Analyst Office to freeze the property tax revenues of basic aid districts at the 2000-2001 level. This revenue freeze would remain in place until such time as a district’s revenue from the state determined revenue limit exceeds the 2000-2001 property tax limit. At that point, the district would become a revenue limit district.

Under this scenario the District would lose $2.6 million in revenues, resulting in a projected budget deficit of $2.6 million. While not as extreme as the Governor’s proposal, it is entirely unacceptable. It results in a leveling down and the use of local property tax revenues for non-education expenditures. It is another route to the “slippery slope” of local property tax confiscation.

School Services of California has provided a revised estimate of what our “fair share” revenue reduction would be if basic aid districts are treated the same as revenue limit districts. Under this scenario, the District would lose the $120 per ADA basic aid allocation and the loss of an additional $250 per student (in some manner as yet unidentified). The total impact of this scenario is a loss of $1.3 million in revenues resulting in a projected deficit of about $917,000 (but no property tax recapture).

The information above reinforces how important it is for the District, staff, parents, and students to continue all efforts to limit our revenue reduction for the 2003-2004 school year to our “fair share.” Anything more than that is unfair and will have a disastrous impact on our program for kids and support for staff.

Political Environment: On Wednesday morning, February 26, seven Marin County basic aid district superintendents (including our Board Chair, Susan Schmidt) met with Senator Burton in Sacramento to inform him of the extreme impact of the Governor’s and Legislative Analyst’s proposals. We asked the Senator to work with the Governor to have him remove these proposals from consideration prior to March 15, so basic aid districts would not have to issue notices of possible layoff to certificated staff (teachers and administrators). He said he would attempt to do so.

Later in the morning, we attended the state-wide meeting of all basic aid districts where we received an update on the political issues from Bob Blattner (School Services), the basic aid districts’ top lobbyist. During the basic aid district meeting, Assemblyman Joe Simitian (Palo Alto) and Assemblyman Joe Nation (Marin) addressed the group. Both received standing ovations for their leadership on behalf of basic aid districts. On Wednesday night, Assemblyman Nation spoke to the Marin County Superintendents and Trustees and reiterated his support of basic aid districts.

The key messages include:

1. The state-wide political efforts of the fifty or so basic aid districts are having a substantial impact in Sacramento. Thirty-two members of the assembly signed a letter sponsored by Assemblyman Simitian (including our Assemblyman, Joe Nation) criticizing the basic aid proposal and asking the Governor to rescind the proposal. In addition, three members of the assembly, including Joe Nation, informed the Governor that they would not vote for a State budget that included any provisions taking away local property tax dollars from basic aid districts.
2. Education Secretary Kerry Mazzoni (former Novato trustee) has acknowledged the basic aid proposals have “gone too far” but that basic aid districts needed to “share the burden” (go to www.bayarea.com/mld/mercurynews/ for the full report). Please note: Secretary of Education Mazzoni will be speaking to Marin County on Thursday evening, March 6, at 7:00pm in the San Rafael High School auditorium.
3. Next year, basic aid districts should assume that our “fair share” will mean the loss of the $120 basic aid allocation as well as an additional $250 per student. At this time, there’s no understanding as to how the $250 would be captured from basic aid districts. Further, this amount could increase/decrease depending on whether or not the current year budget reductions are approved and the state of California’s economy by the Governor’s May Revise report.
4. While it’s possible that the Governor might rescind the basic aid property tax proposal, that action is unlikely to occur prior to the statutory May 17 “May Revise” report (although there’s an assumption that basic aid districts would be notified of the Governor’s intent prior to May 15 to avoid final Reduction In Force notices for certificated staff).
5. Palo Alto Unified is working with legal counsel to develop a consortium of basic aid districts to review the possibility of taking legal action to prevent any taking of property taxes (the Tam Board will consider joining this consortium at their March 4th meeting).
6. Districts were encouraged to prepare for a wide range of possibilities, from a “fair share” loss of revenues to the 85% loss of property taxes. Each district would make budgetary decisions based on local circumstances, including size of reserves, degree of revenue loss, etc. Almost every district indicated the need for some level of layoff notification for certificated and classified staff.
7. Basic Aid districts must assume that the fiscal challenges facing us will not be resolved in the immediate future. Final resolution will not occur until the legislature passes a budget and the Governor signs it. Nobody has any idea when this will occur. This will have an extremely negative impact on high schools, where re-staffing schools and rescheduling massive numbers of students becomes problematic after June.
8. Every basic aid district must continue efforts to influence their local legislators. Both Nation and Burton asked superintendents to have their communities continue sending letters (Nation indicates that he receives about 400 budget related letters each day), but to focus the letter writing on the Governor’s office. Go to the sample letter and key contacts addresses if you haven’t already mailed your letters.

Planning for the 2003-2004 School Year Budget: The administration’s recommendation to the Board remains the same:

The District must be prepared to address a projected budget deficit ranging from $.9 million to $6.6 million. If the District loses $7,000,000 in basic aid revenues, the recommendation is for the Board to platform down expenditures and the impact on students and staff by using some portion of the District’s General Fund Reserve to balance the 2003-2004 budget. Further, the recommendation is to go to the voters a year early and seek a renewal of the parcel tax, scheduled to expire on 6/30/05, with an increase sufficient to restore key components in our program lost due to budget reductions.

If the District loses our “fair share” only, about $1.3 million, the administration’s recommendation is to make the expenditure reductions needed to balance our budget, maintain our program for students, and provide support for staff. Please note: these reductions could result in the loss of staff positions.

And, the District must plan for losing between the $1.3 million “fair share” and the full $7.0 million amount. This will require setting priorities for reductions and restorations, once the State budget is approved.

AT THE 2/25 BOARD MEETING the Board reviewed budget reductions identified by the administration totaling $4.34 million. The identified budget reductions are designed to reduce expenditures while maintaining the basic structure of our District. The reductions would reduce the scope and scale of our programs, not eliminate them. While none of the identified reductions is desired, reductions must be considered if the District is to remain fiscally responsible.

These reductions represent a potential loss of close to 40.0 FTE staff positions, a substantial diminishing of our outstanding program for students, and a substantial diminishing of our support for staff. The reductions will have an immeasurable impact on the morale of staff and their sense of well being as valued employees serving this community and our students.

AT THE MARCH 4 WORKSHOP, the Board will review the budget reductions recommended by staff, students, parents, and community members. Copies of all this material will be sent to staff lounges and school/district offices for public review.

AT THE MARCH 11 MEETING, the Board will take action as needed on approving notices of possible layoff to certificated staff, including all certificated administrators. Prior to March 11, principals will meet personally and privately with each teacher scheduled to receive a notice.

AT THE APRIL 8 MEETING, the Board will review the administration’s recommendations on classified staffing reductions. Prior to April 8, supervising administrators will meet personally and privately with each classified employee impacted by these proposed reductions.

AT THE APRIL 29 MEETING, the Board will take action as needed on approving notices of layoff to impacted classified staff, including classified administrators.

ADDITIONAL KEY DATES INCLUDE MAY 15 - final date for approving certificated Reduction in Force, and June 24 - approval of the 2003-2004 school year budget.

At any time, after the State budget is approved, the Board may take action to rescind layoff notices and restore positions.

SUMMARY: We are facing the worst fiscal crisis in the history of California and the history of this district. Our great strengths as a district are our commitment to excellence for students and our commitment to working together to achieve our goals and to solve our problems.

It is essential that we maintain these commitments. We must maintain our sense of community and we must reach out and support each and every person who may be impacted by a notice of possible layoff.

We must maintain our focus on the real problem — the Governor’s proposal to treat basic aid districts (our kids and our staff) unfairly. Please, continue sending those letters to Nation, Burton and Davis. If you know someone who knows Governor Davis, have that person contact the Governor directly (he does accept calls from people he knows) to inform him of the cost of his continued support of this provision on staff, students, and our community.

The District will continue meeting with representatives of the certificated, classified and management team employee groups to review the impact of any budget decisions on staff and to seek support for budget actions requiring modifications to current employee contracts.

The Board and the Superintendent are also available to meet with staff at staff meetings and/or parent groups. Please contact Laurie (945-3720) to arrange the scheduling.

Please feel free to provide feedback. I appreciate hearing your comments and suggestions blevinson@tuhsd.marin.k12.ca.us. Please access our website, www.tamdistrict.org, for ongoing updates and links to other key sites. And, you are always welcome to attend our Board meetings. The Trustees appreciate hearing from you, also.

MORE from the Superintendent’s Office on the fiscal crisis

Fiscal crisis info (28-Feb-2003)
>> Letter to staff, parents & community
printer-friendly pdf version of this letter

MORE info (14-Feb-2003)
- Letter to staff, parents & community
- Parent/Student/Community Resident Response form
- Basic Aid Backgrounder: Letter from Bolinas-Stinson Union School District Trustee

ALL fiscal crisis info…

KEY CONTACTS IN SACRAMENTO
These are the telephone, fax and mailing addresses of key officials. Faxed or US-mailed LETTERS rather than emails are preferred.

Governor Gray Davis
c/o Michael Bustamante, Deputy Chief of Staff
State Capitol Bldg.
Sacramento, CA 95814
Ph: 916-445-2841
Fax: 916-445-4633

Secretary for Education Kerry Mazzoni
Office of the Secretary for Education
1121 L Street, Suite 600
Sacramento, CA 95814
Phone: 916-323-0611
Fax: 916-323-3753

Senator John Burton
State Capitol Bldg., Room 205
Sacramento, CA 95814
Ph: 916-445-1412
Fax: 916-445-4722

Assemblyman Joe Nation
State Capitol, Room 3013
Sacramento, CA 95814
Ph: 916-319-2006
Fax: 916-319-2106

Email addresses (note that faxed or US-mailed letters are preferred):
Governor Davis: governor@governor.ca.gov
Joe Nation: joe.nation@asm.ca.gov
Senator Burton’s website: http://democrats.sen.ca.gov/senator/burton/

IMPORTANT DATES
March 4: BOARD WORKSHOP
The Board will review budget reductions recommended by staff, students, parents, and community members.
March 6: SPEAKER
Secretary of Education Mazzoni will be speaking to Marin County on Thursday evening, March 6, at 7:00pm in the San Rafael High School auditorium.
March 11: BOARD MEETING
The Board will take action as needed on approving notices of possible layoff to certificated staff, including all certificated administrators.
April 8: BOARD MEETING
The Board will review the administration’s recommendations on classified staffing reductions.
April 29: BOARD MEETING
The Board will take action as needed on approving notices of layoff to impacted classified staff.
May 15: Final date for approving certificated Reduction in Force
June 24: Approval of the 2003-2004 school year budget.