ENCINITAS — After little discussion, the Encinitas Union School District (EUSD) Board of Trustees voted 4-0 at its June 25 meeting to adopt a budget for this fiscal year.
The fiscal year started in July.
Before the vote, Trustee Emily Andrade said the budget situation is “much nicer” than in the past few years.
John Britt, assistant superintendent of business services, said fewer cuts are being levied at the state level.
“The good news here is, unlike prior budgets, this one has considerably less risk,” Britt said. “We don’t have triggers, or mid-year cuts threatened.”
Factoring in all funds, the district forecasts that it will bring in $43.1 million in revenues for the 2013-14 school year. And total expenditures are estimated at $45.6 million — a shortfall of $2.5 million.
For the 2012-13 school year, revenues were $46.8 million, while expenditures clocked in at $49.3 million — again a difference of $2.5 million.
This week, Britt said deficit spending “needs to be worked on.”
EUSD reserves totaled just over $12.1 million in 2011-12 and $10.3 million in 2012-13. It’s expected reserves will be $7.8 million in 2013-14. However, Britt stressed reserves for 2012-13 and 2013-14 will likely be revised upwards given that these budgets aren’t set in stone and are “conservative projections.”
Despite declining reserves, he noted that EUSD is still well above the state-mandated reserve of 3 percent.
Britt said the district would likely continue deficit spending in 2014-15, but to a lesser degree. Beyond that, he said local property values increasing and the state’s improving fiscal outlook bodes well for EUSD.
“We want to get to a point where expenditures don’t outweigh revenues,” Britt said.
On that note, he also discussed whether a new education funding formula would impact EUSD.
Several years ago, the state enacted a “fair share” cut for districts like EUSD that receive most of their money from property taxes, as opposed to other districts that get most of their funding from the state’s attendance-based formula.
“Fair share was really tough on us,” Britt said.
Due to the fair share formula, in 2012-13 the district lost $3.15 million of funding it received from the state. Britt said the district won’t see this state money in 2013-14 or likely in the future, even though California recently did away with the fair share model by switching to Gov. Jerry Brown’s new “local control” formula.
However, new state revenue is coming from one source: Prop 30.
EUSD will likely see $1 million in 2013-14 as a result of Prop 30 passing, which was factored into the estimated $43.1 million in revenue. It’s still unknown if Prop 30 will mean additional money for the district in future years.
This past November, California voters backed Prop 30, the education measure that increased taxes on those earning more than $250,000. It also increased the state sales tax by one-quarter cent.
In 2012-13, Prop 30 let the district keep $2.3 million that would have otherwise gone to the state.
Should Prop 30 have failed, this spring the district would have looked at sending layoff notices to teachers, increasing class sizes or further digging into its reserves.
“It made this year a lot easier,” Britt said.
EUSD receives most of its funding from local property taxes. With home values going up, property tax revenues for the district went up in 2012-13 by nearly $850,000.
However, Britt cautioned property tax receipts could begin leveling off over the next few years.
The cost of salaries for teachers, district staff and other employees is forecasted to reach $23.6 million in 2013-14. It was $23.4 million in 2012-13.
Trustee Maureen Muir was not at the meeting.