October 8, 2004

Public education funding and its effects on the Evergreen School District

How were ESD’s abundant reserves depleted?

By Brenda Franca-Serpa
Special to the Times

Editor’s Note: This article is the fourth in a series of five intended to raise awareness of the primary issues facing our local Evergreen School District (ESD,) and to suggest credible solutions for which the entire Evergreen community can take responsibility.

ESD had $18.2 million in reserves in the 2000-01 school year. When ESD began the 2003-04 school year, the reserves had dropped to about $14 million. By the end of the 2003-04 school year, with a deficit of $3.5 million, ESD had $10.5 million in reserves.

After deducting the 3 percent required reserve, ESD’s 1 percent additional reserve and the then $3.4 million deficit, ESD ended the 2003-04 school year with $7.2 million in total available reserves. These reserves will be reduced to $1.4 million in 2005-06, which is an insufficient amount to meet the 3 percent reserve requirement.

Harsh realities deplete the budget (2003-04)
How did ESD end up with such a huge deficit? The district’s budget depends on the good health of the state’s budget, and when there are deficits at the state level, it reverberates at the school district level. ESD’s budget is adversely impacted by many other harsh realities:

- High employee medical insurance costs and benefits consume 23 percent of the General Fund budget.

- The district salary schedule consumes 64 percent of the General Fund budget. Statewide averages for salaries and employees benefits combined run 85 percent, and the ESD is at about 87.3 percent and rising.

- Class Size Reduction (CSR) is expensive to implement and requires 90 teachers who have advanced up the 12-step/column salary schedule. The funding for CSR has not kept up with rising teacher salaries. And cost of living adjustments were not fully funded.

- Special Education, whose implementation is mandated by the state and federal government, is not 100 percent funded by the state and federal government. Yet by law, ESD must implement a Special Education program. ESD must borrow about $3 million annually from the Unrestricted General Fund to implement Special Education, which is called encroachment.

1972-73 Base Revenue Limit negatively impacts ESD’s budget
If ESD had its Base Revenue Limit revised to reflect the Evergreen of 2004—rather than the Evergreen of 1972-73 when the initial Base Revenue Limit was set based on per pupil spending—it would not be on the brink of insolvency today.

If ESD had its Total Revenue Limit revised to reflect the Statewide Average of All Elementary School Districts Total Revenue Limit, it would not be on the brink of insolvency today.

The ESD’s Total Revenue Limit in 2002-03 was $4,465. The Statewide Average of All Elementary Districts Total Revenue Limit was $4,636. The difference does not seem striking at first, until you multiply it by the average daily attendance of 12,567 students ($2,148,957).

This difference rose from $67/ADA in 1992-93 to $171/ADA in 2002-03. The lack of sufficient Total Revenue funding amounts to a loss of $9.4 million dollars from 1992 to 2003 for ESD.

Total Revenue Limit Comparisons
ESD is a large population elementary school district. When compared to two neighboring elementary school districts in Santa Clara County (Oak Grove and Alum Rock) with similar sized populations (range of ~12,000 to ~16,000), their Total Revenue Limit Sources were higher than ESD. The statewide average was also higher. Why is an ESD student worth less than students in other counties in California and why are they worth less than neighboring school districts within Santa Clara County?

We don’t spend anywhere near the statewide average of all elementary districts’ spending per pupil, because we don’t receive the statewide average of all elementary districts spending per pupil funding.

Statewide, the spending per pupil varies widely. The statewide average of all elementary districts’ spending per pupil was $6,542 in 2002-03. The ESD’s per pupil spending was $6,141 in 2002-03.

The difference, $401, does not seem significant until you multiply it by the average daily attendance of 12,567 students. This raises the stakes to $5,039,367 in just one fiscal year. If ESD’s per pupil spending were equal to the statewide average of all elementary districts, ESD would not be on the brink of fiscal insolvency.

What do we want and expect from the ESD?
As a community, do we risk the loss of class size reduction or face the prospect of school libraries closing? Physical education, art and music programs have been severely reduced or cut. Do we risk losing what little we have?

All of the programs offered by the ESD keep our children’s test scores high, which creates desirable neighborhoods, increases property values and ultimately benefits the community of Evergreen.

Voting YES on Measure N can lessen the negative consequences to the ESD’s budget under-funding created by the State of California.

School districts have limited ability to raise funds. School districts can’t ask voters to raise property taxes for schools since the passage of Proposition 13. We as a community need to raise money by passing Measure N, the parcel tax.
Voting YES on Measure N would reduce the nearly $5 million deficit to ~ $3.1 million.

We have a choice, live within our budget, which means losing the most basic school programs, or raising the money to fund the programs by voting YES on Measure N on Nov. 2.

Evergreen Citizens for Local Schools
If you have any spare time, no matter how small, and desire to become involved in your community, please support Evergreen Citizens for Local Schools, a committee formed to aid the passage of the Measure N.

This is a campaign committee formed of and by parents, local residents, business owners and community members working hard to pass Measure N. E-mail Will Ector at ecls2004@ev1.net to volunteer your time or have questions answered.

Forming and funding an education foundation by the Evergreen community can lessen the negative effects of ESD’s under funding by the state of California.

School districts can’t ask voters to raise property taxes for schools, but interested and involved members of the community can form and raise funds for a private foundation (they could name it the Evergreen Education Foundation) directly benefiting the ESD.

This foundation, formed solely to aid all of the students in the ESD would not circumvent fundraising done by any school in the ESD. This foundation would raise funds to ensure the ESD has the required 3 percent reserves in its budget.

It could also provide each child in the district with what the majority of the parents in the district wish to reinstate: music, art and P.E. It might be that each school might want to choose either music, art or P.E., because there may not be unlimited funds to provide all three programs at every school.

Why form an education foundation?
As a community, we value education. We value the excellent service provided by the ESD. We desire to maintain our excellent school system. We value the excellent service provided by the ESD and desire to improve it by reinstituting music programs, art programs and P.E.

I need willing people in the Evergreen community to help me start an education foundation. Throughout the nearly 1000 school districts in California, 400 have created education endowment foundations to stave off under funding and many have parcel taxes. If you are interested please e-mail Brenda at byfs@sbcglobal.net.

What will be cut to balance the ESD’s budget?
Mid-year program cuts in the 2003-04 school year totaled $250,000 and were to school equipment/supply budget, district equipment/supply budget and substitute budget. $3.8 million dollars in program cuts were made previous to 2003-04.

Potential program cuts to the 2004-05 ESD Budget could run the gamut:

- Cuts to GATE (Gifted and Talented Education Program) ~ $78,151

- Cuts to EIA (Economic Impact Aid) ~ $105,000

- Cuts to district office clerical ~ $30,000

- Health/office clerks, at the elementary schools ~ $120,000...

The list goes on and on to include district staff development personnel, office assistants at middle schools reduced by three hours, media clerks who assist the librarians reduced to four hours per school, librarians, elementary assistant principals, middle management at the district, reduced nurse presence and reduced maintenance personnel.

At this point it is too early to speculate about program cuts and salary and benefit renegotiations for 2005-06.
The business office branch of the ESD will examine the budget and create a list of possible program cuts including reduction in employees and will present it to the school board members.

Working with school district administration, the board members are responsible for fiscal, instructional, personnel and student policies. The board members will decide on a course of action. The school board members act on behalf of all of the students in the ESD and their best interests.

Balancing the ESD’s budget for 2005-06 is painful, because of the $4,977,000 million dollars in cuts that need to be made. Passing the Evergreen parcel tax would reduce the nearly $5 million deficit to ~ $3.1 million.

The fifth article in the series will appear in the next edition of the Evergreen Times.

It will explain the importance of voting YES on Measure N. It will also delve into education foundations and how more than 400 school districts in the state of California have started education foundations. The education foundations bolster the sagging budgets of their school districts and help continue or reinstate enrichment programs for its students.

Brenda Franca-Serpa is an involved member of the Evergreen community. One of her children is a student of Laurelwood Elementary School and her other child is attending Silver Creek High School. If you have specific questions about any of these articles, e-mail her at byfs@sbcglobal.net.