Schools enjoy unexpected funds, but midyear cuts are possible

After three lean years, unexpected state funds have given school districts from Sacramento to San Diego a financial breather, allowing them to rehire staff and restore smaller class sizes and programs just as most students prepare to return to school in coming weeks.

School districts had prepared for cuts of $300 per student or more, but the state budget adopted in late June gave schools the same funding this year as last. Thousands of pink slips had gone out, and such programs as preschool and child care had been slashed.

“School districts are relieved that it’s not another year of business as usual of cutting education significantly,” said Bud Burrow, a consultant to the Kern County schools superintendent.

But the respite might not last. School financial experts warned that lagging state revenues could trigger midyear cuts. This month, state Controller John Chiang reported that revenues were $539 million, or 10%, below projections — news compounded by slower-than-expected national economic growth. If revised estimates in December fall more than $4 billion below projections, funding for schools will be cut by $1.5 billion — about $260 per student.

“School districts are bracing for cuts they truly cannot afford,” said Ron Bennett, president of School Services of California Inc., an educational financial consulting firm in Sacramento. “This is a ticking time bomb.”

Los Angeles Unified Supt. John Deasy said he was “gravely worried” about midyear cuts and has begun meeting with staff to plan for the possibility. Among other things, he said he intended to broach the subject of shortening the school year with the teachers union.

The state budget “was put together on assumptions and illusions of revenue rather than facts and reality,” he said. “That’s proven to be incredibly problematic.”

Preparing for the worst, some districts are hanging on to whatever unanticipated state funding they received. Santa Ana Unified, for instance, received $17 million but is stashing away those funds in case of midyear cuts, said Michael Bishop, the district’s chief budget official.

But other school districts have chosen to spend the money on the classroom.

At San Diego Unified, the state’s second-largest school district, with 132,000 students, the state budget provided $36 million more than anticipated. The first thing the school board did was direct administrators to refill 300 full-time teaching positions to restore smaller class sizes — from 29 students per teacher to 24, and down to 20 in low-income schools, according to Bernie Rhinerson, the district’s chief of staff.

“What extra money we have, we want to put teachers back in the classroom,” he said. “There really was no debate about that.”

Elk Grove Unified, the state’s fifth-largest district, with 61,000 students, was able to bring back 445 teachers. The Sacramento County district had initially budgeted for a funding cut of $670 per student in March, prompting officials to issue more than 1,000 pink slips.

Better-than-expected state aid also helped several school districts teetering on the edge of financial insolvency submit balanced budgets this year, county education officials said. All three districts facing bankruptcy in Sonoma County will make it through the year, officials said, as will Southern Kern Unified, Natomas Unified in Sacramento County and others. Inglewood Unified School District, however, still faces insolvency after its budget was rejected this month by the L.A. County Office of Education.

Elsewhere in Los Angeles County, the beefier public school budget has not necessarily resulted in a bonanza of unexpected funds because many districts built their spending plans on the assumption that they would receive the same funding as last year, following the advice of county education officials.

In L.A. Unified and Long Beach Unified, for instance, budget officials received no more funding than expected, leading both to issue thousands of pink slips to help close multimillion-dollar deficits in their 2011-12 budgets. The budget shortfalls for them, and many other districts, were caused in part by increased costs and funding losses tied to falling enrollment and the decline of federal funds. In signing the budget, Gov. Jerry Brown said spending cuts tied to those factors were acceptable.

So far this year, L.A. Unified has been able to rehire 4,170 of the more than 5,700 teachers, nurses and counselors who received pink slips, after the teachers union agreed to four unpaid days and the district found other cost savings. But the district has no plans to rehire many more, according to Megan Reilly, the district’s chief financial officer.

That position does not sit well with the teachers union which wants L.A. to restore all teaching jobs.

But Dean Vogel, president of the California Teachers Assn., said it was “unrealistic” to expect all layoffs to be rescinded and acknowledged that districts had a right to reduce spending to account for declining enrollment and other factors.

Many educators across the political spectrum agree on one thing: that schools have suffered too many cuts for too long. The one-year reprieve, many said, will only push the problem into next year and force even deeper reductions without more stable and adequate funding.

Several school officials said they don’t know where to cut further without devastating students.

Elk Grove, for instance, has slashed about a fifth of its budget in the last three years — wiping out summer school, freshman athletics and five school days and requiring officials to increase class sizes and negotiate staff furloughs and salary rollbacks.

“There is no low-hanging fruit left,” said Steven Ladd, the Elk Grove superintendent. “There’s not even a tree left — there are only stumps. We as a state owe our children much, much more.”

teresa.watanabe@latimes.com