One year ago, the Burbank Unified School District celebrated an agreement between Gov. Gavin Newsom and lawmakers on a state budget that avoided drastic cuts in school funding.
The local district breathed another collective sigh of relief this week with its most recently proposed budget, which was bolstered by federal stimulus and gave BUSD higher-than-expected revenue this year and next. The Board of Education unanimously approved the adoption of the proposed budget in a virtual special meeting on Wednesday.
In Gov. Gavin Newsom’s May revision to the state budget, schools would receive more funding due to an increase in the cost of living adjustment, which the state proposes to increase from 3.84% to 5.07% for the 2021-22 fiscal year.
“We were really pleased to see what the governor came out with in this May revise,” Debbie Kukta, assistant superintendent of administrative services, said during a meeting on June 17. “In 2021-22, we are seeing what we call a mega COLA at 5.07%, which is huge for us. So that is exceptionally good news. This is a good budget. I think everybody in the school district accounting and fiscal arena really thinks that this is a pretty darn good budget that we’re seeing.”
With $65 million in federal and state revenue this year, BUSD saw a net increase of $10 million, giving it a beginning fund balance of $19.19 million for the upcoming year.
Kukta said the extra money in the reserves gives them a longer glide path but warned of a fiscal cliff in a few years, estimating a $6.3 million deficit in 2022-23 and a $9.49 deficit the following year.
“The benefit of these one-time monies is that it has given us a little more time to plan … it’s never too early to start planning.” Kukta told the board.
Employee salaries and benefits account for 84% of the district’s expenditures, and that total cost is expected to rise in the next fiscal year with employers having to contribute more to employee benefits. Employers covered 20.70% of CalPERS benefits this year and are expected to contribute 22.91% in 2021-22 and 26.10% the following year. There will also be an uptick in contributions to the CalSTRS, which provides benefits for teachers, from 16.92% in 2021-22 to 19.10% in the following fiscal year.
Kukta said she is hopeful that districts across the state will “see some relief in the percentages” in later revisions to the state budget.
“Those are pretty substantial costs going forward for us,” she added. “It’s a big part of our budget and why we’re seeing increasing deficits.”
Another concern brought up by staff is the estimated decline in enrollment and the average daily attendance. Funding from the state is determined by the total days of student attendance divided by the total days of instruction.
Board member Steve Ferguson urged staff to begin planning but warned stakeholders that difficult decisions may have to be made in the future to balance the budget.
“The more cash flow we have, the less we have to take out in loans,” Ferguson said. “The priority right now is to move this bar as we can, and yes, that unfortunately means more difficult choices. But I am grateful to the superintendent’s budget committee that continually is picking up the district and shaking out our pockets for every dime. That’s how we’ve survived to date.”