Schools Still Face Budget Woes After Prop. 30 Passes

With the passage of Proposition 30, the Palos Verdes Peninsula Unified School District was spared steep cuts this year, but budget problems still loom.

The new law will enact a temporary quarter-cent sales tax hike and increase state income taxes for single income households earning $250,000 or more. It is expected to raise $6 billion annually for seven years.

Nevertheless, the funds the schools receive as a result of the proposition are not new funds; rather, they are funds that prevent additional cuts. PVPUSD would have lost about $5 million this school year if the measure had not passed.

“The passage of Prop. 30 means, for the most part, we will be receiving the same funding this year as we did in the previous year. No additional, no new money, but the same as last year,” Deputy Superintendent of Business Services Lydia Cano said at last week’s board meeting.

The funding for this school year is more secure than it was before the election, but uncertainty still limits the amount the district is able to plan. According to Superintendent Walker Williams, it is still a bit too soon to fully know the effects of Proposition 30, but the district is in a much better place than it would have been if the measure didn’t pass. He emphasized that this didn’t mean there wouldn’t be cuts, but there would be less of them.

One thing that concerns Williams and many of the board members is the possibility that some people may have higher expectations of what the funds can do than what is actually possible.

“What we worry about a little bit is everybody views it as finding a solution for public education funding and it’s not that either,” he said. “Throughout the whole campaign, they were basically saying that it would maintain flat funding. I’m not quite sure how they are defining flat.”

Even with the funding at the current level, the district will have to dip into its reserves to pay staff this week, Cano said. This is due to statewide deferrals in payments to districts, Walker said.

“Our cash flow is always still an issue for school districts now because the state doesn’t pay us on time," Walker said. "In order to make payroll, we often have to go into our reserves and other accounts and then we pay ourselves back when the government pays us."

The district will take information on when the differed funds will finally be paid into account as they plan the budget.

Complicating budget matters more are additional variables such as the governor’s January budget and the possibility of a reduction in funds if a budget agreement isn’t reached in Washington and the nation goes over the fiscal cliff.

“Those are all the things that make public school finance just so tricky,” Williams said. 

At the meeting School Board Vice President Larry Vanden Bos said the district will still likely have a deficit of $1 million or $2 million this year.

“Either we have option of fixing the structural deficit somehow and getting it so we’re at least breaking even or finding new revenue or doing something so that we’re not spending down what is really not in any reserves to begin with while still finding a way to provide a program that our community wants, our faculty wants to give and our students deserve,” he said.

Vanden Bos summed up the funding out look for the district: “We’re in a tunnel and there’s a light coming, I’m just not sure it’s a light shinning on us or if it’s still a train coming at us.”

The board will meet over the next coming weeks to find create a more complete budget with the new information available and will discus the interim budget at the next board meeting.

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