Report: PUSD Off Budget Supplemental Revenue and Governor Budget Impacts
Off budget revenue from local sources provide an offset to expenditures, however Governor’s Restrictive Budget continues to be an important factor in Piedmont Schools funding future.
The Piedmont Unified School District (PUSD) Budget Advisory Committee held a meeting on March 2, 2017 at the PUSD District Conference Room at 3:30 p.m. to discuss their upcoming budget proposal to the school board. Song Chin Bendib, the Assistant Superintendent of Business Services, led the meeting, which covered the changes in the PUSD budget that have occurred between their last meeting before the First Interim, which ended on December 14, 2016, and the Second Interim, which ended on March 8, 2017, as well as changes in the coming three years.
Between the First and Second Interim Review, PUSD’s revenue has grown from $38,875,229 to $39,253,375, an increase of $378,166. This revenue is broken down into approximately $109,000 from the State of California, $75,000 from the College Readiness Block Group, $37,000 from the Regional Occupation Program (ROP), $4,000 for Special Education spending. The largest subdivision in revenue is the approximate $252,000 from “local revenue”, which comes from various activities such as field trips, athletics, the Speech and Debate Club among other sources. However, this source of revenue does not count towards the final budget line as this revenue is spent immediately on the supplemental activities they were designated for. Essentially, this fund accounts for any money coming in to pay for supplemental activities; for example, the money collected to pay for the AP European History field trip to Europe would count towards this revenue fund, but would not go to the District, rather would just be used to pay for the field trip.
However, this was offset by an increase in spending of $369,986. The most notable factor in the increase in spending was an approximate $127,000 increase in employee benefits, which was primarily due to increases in healthcare costs, said Chin Bendib. This increase is caused by employees upgrading their healthcare plans from single to married, or married to family, which costs the District more.
In addition to this hurting PUSD’s budget, the California State Government also revised their proposed budget, providing less funding than originally expected in December. Governor Brown implemented a 5.8 billion dollar decline in revenue, resulting in a $465,000 decline in revenue for PUSD alone. This decline in revenue was partially due to CalPERS and CalSTRS being deep in debt, and Governor Brown cutting funding for schools to help remedy this issue.
After Chin Bendib questioned why Governor Brown would not just dip into his large rainy day fund to help bail out these programs. She argued that this is what the fund is for, and that there is no reason to continue saving when there are issues now. And although I agree that there are issues with the current budget and within the school system, I do not think that the government should dip into its rainy day fund in order to address this issue. The rainy day fund should be reserved for emergencies and catastrophe, not for smaller, systemic issues like the cutting of school funding. This debt that caused the funding cut seems to be systemic and simply bailing it out with the rainy day funding does not appear to be sustainable. Besides, using the money now would justify spending in many other areas and for other smaller issues, thus making it not a rainy day fund, but rather a fund to correct mistakes, which would not be sustainable for very long.
In looking at projected long term budgets, PUSD also looked to be short of breaking even. The State of California requires school districts to plan out projects budgets for the next three years. The State also requires that school districts have a ‘cushion’ fund equivalent to 3 to 4% of the school’s expenditures. PUSDs budget met this requirement for the 2016-2017 fiscal year, but will fall $108,602 short of the requirement for the 2017-2018 fiscal year and $796,384 short in the 2018-2019 fiscal year.
During the meeting, I interviewed a member of the audience. Sixth grade teacher at Piedmont Middle School Gabriel Kessler, who also serves as the Vice President of the Teacher’s Union, attended the meeting to better fulfill his positions, but also to be better informed as a citizen. Kessler believed that all people should be involved in civics, and that more people should come to these meetings. “People should go to these government meetings,” Kessler said. “It is important to be involved in government and informed.”As for his reaction to the meeting, Kessler did not have any huge reactions, other than slight concern, stating that, “It’s concerning to see [that the budget is short of requirements], but it will be interesting to see how they [address the issue].” Kessler plans on attending more city governments and continuing to be informed, but has no other plans to take action on the budget.
He also asked a question and got the paraphrased response.“Is the May revise an event that occurs every year and is required, or is it optional? If so, how often does it occur?”
Song Chin Bendib responded by saying that the May revise is not required, but it occurs fairly commonly. This year, the proposed budget is expected to pass through the California state budget, thus not necessitating a May revise. The May revise is essentially intended to allow the Governor one final chance to change the budget before it becomes final for the remainder of the fiscal year. This year’s May revise is of particular importance to the District because the Governor unexpectedly slashed funding to the schools to pay off other debts. The May revise represented the last chance for Governor Brown to back off those funding cuts and thus help PUSD balance their budget, but Chin Bendib was doubtful that the change would occur. I asked a question in order to clarify the board on the history of the May revise and whether it was a rare occurrence or an annual tradition. However, despite its common occurrence, a May revise does not seem likely for this fiscal year.
by Maxwell Lee, Piedmont High School Senior
As an 8 year member of the Piedmont Board of Education and the Board President when the first school parcel tax was passed, I do not remember that there were any exceptions to the payment of the tax for either the schools or the city.
As the assistant treasurer of the Lake Merritt United Methodist Church in Oakland and a past treasurer of the Women’s Board of the Oakland Museum who own a large warehouse on Lancaster Street in Oakland, both entities pay ALL parcel and special taxes to the City of Oakland. I have submitted copies of their tax bills to the superintendent with no response.