Proposed budget could yield $500K deficit for SSUSD

Rebecca Neipp

News Review Staff Writer

Proposed budget  could yield $500K  deficit for SSUSDIn the days and weeks that followed Gov. Gavin Newsom’s budget proposal, public agencies have been analyzing how those projections will impact their bottom lines.

For education in general, the Legislative Analyst Office and other advocates have predicted that trends of increasing mandates without proportionate revenue commitments have left underfunded health care, retirement and cost-of-living adjustments in the compensation packages already negotiated across the state.

For Sierra Sands Unified School District in particular, this funding deficit could mean upward of $500,000 in the coming year.

“It is not unusual for schools to make salary and other compensation commitments based on projections,” said SSUSD Superintendent Dr. David Ostash. “But when the state reimbursements come in lower than expected, it certainly makes this difficult.”

Pam Smith, assistant superintendent of finance and business development at SSUSD, presented a report to the SSUSD Board of Trustees at its Dec. 16 meeting.

The good news is that the economy is doing better than expected. The bad news is that new revenues cover only about three-quarters of the costs committed to serving the salary schedule, she said.

She presented highlights from a report from School Services, one of the leading consultants for public education in California, that identifies the two retirement funds, health-care costs and a COLA-only environment as the “Four Horsemen of the Apocalypse” in education funding.

“The amount we will be receiving will not cover the increases we have contracted for,” said Smith.

According to Ostash, employee compensation packages comprise about 85 percent of the district’s budget. The median salary is about $72,500 annually, worth a total of $103,000 once benefits and retirement contributions are factored in.

Smith and Ostash agreed that salary formulas — and the revenues that fund them — are too complicated to predict with any great deal of precision. But Ostash noted that with so little wiggle room outside of wage contracts, making up the deficit in a budget of of approximately $70 million could be a challenge.

Typically, the governor’s budget goes into legislative committees for negotiations before revisions are announced in May, leading up to the final legislative approval in June.

“A lot can potentially change between what is proposed and what is adopted,” said Ostash. “But in the last few years, we have seen relatively static numbers throughout that process.”

He said that Sierra Sands continues to lean on consultants for insight into the direction of educational funding and mandates.

“Newsom is a relatively new governor. We see that he has a commitment to education, but I think his passion for certain programs is different than what we have seen previously,” said Ostash.

Although Newsom and his predecessor Jerry Brown are both Democrats, the latter is widely viewed as the more fiscally moderate of the two.

Brown was also a champion of the local-control model, allowing individual districts a certain amount of discretion in building their budgets, as long as desired outcomes were achieved.

“Brown put a lot more money into the base portion of the funding pie and let districts decide what to do with it,” said Ostash.

“Newsom appears to have an interest in very specific programming. For example, he wants to expand education into preschool age, but has not necessarily identified the funds to make up for those increased obligations.”

Ostash said the district had not yet made any decisions on how to face the latest funding challenge.

“It certainly puts more pressure on ensuring our financial obligations are met, but sustainability will continue to be a No. 1 priority in servicing our students.”

Story First Published: 2020-01-31