Despite six unpaid furlough days for all teachers and equivalent pay reductions for administrative personnel, the Los Alamitos Unified School District is not able to offset governmental funding reductions and balance its books. The Board of Education this week approved another deficit spending plan for the fiscal year beginning next week.

Earlier this year, the district entered into agreements with its unions to reduce wages through unpaid furlough days. The staff took 2 days off this year and will take six days off in the new school year which begins on July 1, 2010. The district agreed to take funds out of the reserves to match the savings from the furlough days. The six furlough days will reduce teaching days by four and non-student preparation days by two.

At the school year end Board of Education meeting this Tuesday, the district senior leadership staff, headed up by Superintendent Dr. Gregory Franklin, presented an impressive list of accomplishments. The board also received the year end budget presentation for next year and Dr. Franklin was quick to point out that the district is doing more with less. Dr. Franklin also made it clear that the district’s deficit operations cannot continue indefinitely.

Among others, Dr. Franklin listed these accomplishments for the year:
* Interest Based Bargaining with employee unions resulting In contract agreements that reduced payroll costs to the District, while maintaining class sizes.
* Improved on campus substance abuse results.
* The McGaugh modernization project was completed this year on-time and below budget.
* More high school students taking and passing advance placement classes.
* Only two district high school seniors have not yet passed the high school graduation test.
* Scores on state tests continue to rise, as do scores on Advanced Placement exams at the high school.

But, the state test results lag behind the budget cutbacks. The students are receiving less instruction time, the teachers have less administrative support, and students have fewer counseling and other resources to guide and help them. Whether or not the district can continue to improve results with declining budgets remains to be seen.

At the beginning of this school year, the district had just under $30 million in its various reserve accounts. With a projected $2.3 million loss for the current year, reserves will fall to about $27.4 million by June 30, 2010.

The budget just approved by the Board of Education projects further deficits for next year of $4.4 million. This will further deflate district reserves to about $23 million by June 30, 2011.

The budgeted receipts for next year total $65.4 million. This is a drop of about 4% from the money the district received in the year ending on June 30, 2010. While this might not seem like a huge decrease for next year, that’s because the big hit to district finances came this year compared to 2009.

According to information provided by the district and analyzed by www.OC180NEWS.com, for the year ending June 30, 2009, total receipts were $80.4 million. For the year ending June 30, 2010, total receipts will be about 68 million. That means the district will operate the schools during the year ending June 30, 2011 with$15 million less money then they had two years ago. That is about a 19% reduction.

As reserves continue to shrink, it will be even harder to balance the budget in future years. The automatic raises teachers receive—known as step and column—push up costs regardless of other factors. Thus, the district’s operating cost increase every year by much more than inflation, and unless more money starts flowing from the state, more drastic cost reductions will be inevitable.

Dr. Franklin reported to the Board “The District continues to strategically plan for the most effective use of its dwindling resources. As part of the overall strategic plan, the District is judiciously spending from reserves to further weather the fiscal crisis.”

At some point, cost reductions will adversely affect student achievement and district success. This, in turn, will directly depress real estate values throughout the Los Alamitos Unified School District.