SMUSD Projected Budget
Over the past 10-12 months, we have seen an increase in community comments and activity surrounding District Leadership and how the District is handling the pandemic in regards to learning experience and a safe return to in person learning plan. As I have mentioned in previous blog posts, those are important items, but very short sighted. I am surprised there is not more discussion amongst parents and the community about the adopted and projected budget for the coming years. Attached below is a link to the District business page where you can retrieve a copy of the adopted budget for 2020-2021 and future projections. Based on projected revenues (which is based on historical data, LCFF (Local Control Funding Formula), and average daily attendance (ADA)), revenue is projected to decrease for the next 3 consecutive years, while expenses continue to increase. School District expenses are mainly compromised of 87% (based on P&L posted on SMUSD website) salaries and benefits of certified and classified employees.
Anyone who has managed a P&L knows you can't have revenue and expenses going in opposite directions and expect to have a sustainable model.
What could be contributing to reduced revenue for the District? No upward adjustment in cost of living adjustment (COLA), unemployment (income and payroll tax revenue), loss of private businesses (loss of income tax), people leaving the District or State, this is just to name a few we face as a result of the pandemic.
What could be causing an increase in expense? Earmarking cost of programs before revenue is actually received, agreeing to compensation increases without a guarantee in revenue to cover agreements, overstaffing, cost of goods, reserves, building maintenance and many other items.
Whomever is on the board for 2020-2021 school year will have some tough decisions to make to get the budget back in line. We can't continue to borrow from one fund to the other to keep the General fund a float. In addition to the board, this is an all District effort to get the budget back in line. While a majority of this is on the District Admins and the Board, this is an all team effort to work together to get the budget in line. This means that labor partners, vendors, and the community need to come together for the good of the District to get the budget in line, and then ensure there are safe guards built in the future to not allow the short fall to happen again. While I understand we are in a once in a 100 year pandemic which has decimated projected revenue, it doesn't mean something like this won't happen again. We need to ensure we learn from this experience and be better prepared in the future, because something else will happen again.
Please take the time to glance at the budget. It will help you better understand the tough decisions that have to be made in the coming months, and what we should expect of our board to be fiscally responsible with the planning of the changes needed.