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SPUSD’s Finances Are ‘Flashing Yellow’

By Eric Licas

The Review

Superintendent Geoff Yantz offered a breakdown of the financial challenges facing the South Pasadena Unified School District during the Board of Education’s meeting on June 11.

District officials have repeatedly said they will be able to avoid layoffs this year, but analysts project that a mix of rising costs, decreasing revenue amid a statewide budget crunch and declining enrollment will chip away at the district’s reserves over the next three years.

“We’re certainly not at a place where there’s a red light,” Yantz said. “But I would share that it’s really a flashing yellow light, for simple analogy, when it comes to expenses and remaining financially disciplined.”

State funding accounts for about 12% of SPUSD’s funding, according to staff reports. California currently faces a deficit of at least $45 billion, and that may impact how much funding makes it to South Pasadena Schools.

Gov. Gavin Newsom had presented a complex plan designed to avoid cuts to education by allowing schools to keep $8.8 billion in funds that were overspent on education last year, essentially turning it into a no-interest loan. However, the state’s largest teachers union, the California Teachers Association, said that budget maneuver will negatively skew the formula used to calculate the amount of funding schools get, ultimately costing them money in the long run. 

In late May, though, both sides came to a compromise. The updated plan will defer the repayment of overspent money while also taking into account the rising cost of education in future funding assessments.

At SPUSD, the cost of running special education rose by $2 million, Yantz said, and the price tag on health benefits for the district have gone up by $1 million. On top of that, revenue from the Local Control Funding Formula — the district’s primary state funding — decreased $1.6 million.

Meanwhile, SPUSD’s attendance rate dropped from 97% to 96%, Yantz said. That caused a roughly $250,000 reduction in the district’s funding. Yantz added that overall enrollment has declined by between 175-185 students, likely due to a historic drop in California’s birth rate. That also means another $450,000 in lost revenue. Rising housing costs and older residents staying longer in their homes are other factors in the declining enrollment, according to officials. 

First published in the June 21 print issue of the South Pasadena Review.

DISTRICT, UNION HEAD TO NEGOTIATION TABLE

The district’s current budget plan does not take into account the results of negotiations between SPUSD and the unions representing its teachers and staff. 

During the meeting, the Board of Education received an early list of topics from the California School Employees Association that its members wish to negotiate over. These include increases to salaries and benefits, additional protections related to “out-of-class work,” and issues related to overtime, promotions and leaves of absence.

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