Heather's article in the Daily Journal - Emergency schools cuts total $3.5M
Winter and spring sports could be cut, temporary teachers, custodians, librarians and computer lab technicians could be fired and memos might be sent only via e-mail in an effort to cut $3.5 million from the San Mateo Union High School District budget by Sept. 29.
A number of incorrect property tax projections, county tax rebates, rising special education costs and late notifications led to the district's current deficit position, said Superintendent Sam Johnson. The County Office of Education is requiring the district to create a plan to end the year with $2 million in its reserve a feat that will require the district to cut $3.5 million. The district is creating a list of suggested cuts to be reviewed and finalized by Sept. 21. The district ended up receiving $4.3 million less in property taxes than originally predicted over the last two years, said Johnson. All predictions, at the time, were that the $2.3 million lost in property taxes during the 2004-2005 school year was a fluke. It only got worse as various commercial property tax lawsuits added up and special education costs exceeded predictions. The perfect storm? of financial problems, as Associate Superintendent Liz McManus called it, began for the district in November 2005 when the district learned it would have $811,000 less property taxes than anticipated, said Johnson.
Ninety-two percent of the district's general fund comes from local property tax. The county assessor's office gives the district predictions of this incoming money in April or May. The district closes one fiscal year at the end of June. The district lost $3.1 million between November 2005 to July 2006 to tax rebates and special education costs $1.5 million of which was taken away after the close of the fiscal year. The current school year's budget must make up for this late deduction. Much of the tax rebates were given to businesses like hotels and airlines that asked for hardship reductions when profits dropped after the terrorist attacks of Sept. 11, said McManus. The lawsuits took a number of years, making the tax rebates retroactive, she said. District officials had hoped to have a year or two to get the budget back on track, however, the County Office of Education had other plans. The district, by law, must maintain a 3 percent funds reserve, in this case $2.6 million. The district would end the year with nothing if cuts were not made. The district must create a plan to have $2 million at the end of this school year, said County Superintendent Jean Holbrook. The plan must be turned in by Sept. 29. It's lower than the state required 3 percent but that's why we require a fiscal solvency plan, to explain how they're going to fully restore the 3 percent minimum,? she said.
The plan of attack: Make cuts. The district is in the process of asking teachers, parents and staff for suggested cuts. All suggestions, even ones which would not change the situation, are put on a list. McManus will cut the list down for the board, who will make final decisions on Sept. 21. More than $3.5 million in cuts will be provided to give the board members options. The list has 70 suggestions including reducing the number of temporary teachers, reducing after-school sports programs, cutting coaching stipends for winter and spring sports, increasing the number of special education students in a class and reducing security on campus. Some items require negotiations, like a salary roll back. Salaries were negotiated before the district knew cuts were required, said Johnson. Teachers and classified staff would have to agree to a cut before salaries can be rolled back. The district is considering changes like working with the College of San Mateo for extra course options rather than cut the seventh period to save nearly $400,000. Board President Marcia Cohn-Lyle offered to cut her $240 monthly stipend until things start looking up.
A budget meeting will be held 7 p.m. Thursday, Sept. 21 at the San Mateo Adult Resource Technology Center, 789 E. Poplar Ave., San Mateo.
Winter and spring sports could be cut, temporary teachers, custodians, librarians and computer lab technicians could be fired and memos might be sent only via e-mail in an effort to cut $3.5 million from the San Mateo Union High School District budget by Sept. 29.
A number of incorrect property tax projections, county tax rebates, rising special education costs and late notifications led to the district's current deficit position, said Superintendent Sam Johnson. The County Office of Education is requiring the district to create a plan to end the year with $2 million in its reserve a feat that will require the district to cut $3.5 million. The district is creating a list of suggested cuts to be reviewed and finalized by Sept. 21. The district ended up receiving $4.3 million less in property taxes than originally predicted over the last two years, said Johnson. All predictions, at the time, were that the $2.3 million lost in property taxes during the 2004-2005 school year was a fluke. It only got worse as various commercial property tax lawsuits added up and special education costs exceeded predictions. The perfect storm? of financial problems, as Associate Superintendent Liz McManus called it, began for the district in November 2005 when the district learned it would have $811,000 less property taxes than anticipated, said Johnson.
Ninety-two percent of the district's general fund comes from local property tax. The county assessor's office gives the district predictions of this incoming money in April or May. The district closes one fiscal year at the end of June. The district lost $3.1 million between November 2005 to July 2006 to tax rebates and special education costs $1.5 million of which was taken away after the close of the fiscal year. The current school year's budget must make up for this late deduction. Much of the tax rebates were given to businesses like hotels and airlines that asked for hardship reductions when profits dropped after the terrorist attacks of Sept. 11, said McManus. The lawsuits took a number of years, making the tax rebates retroactive, she said. District officials had hoped to have a year or two to get the budget back on track, however, the County Office of Education had other plans. The district, by law, must maintain a 3 percent funds reserve, in this case $2.6 million. The district would end the year with nothing if cuts were not made. The district must create a plan to have $2 million at the end of this school year, said County Superintendent Jean Holbrook. The plan must be turned in by Sept. 29. It's lower than the state required 3 percent but that's why we require a fiscal solvency plan, to explain how they're going to fully restore the 3 percent minimum,? she said.
The plan of attack: Make cuts. The district is in the process of asking teachers, parents and staff for suggested cuts. All suggestions, even ones which would not change the situation, are put on a list. McManus will cut the list down for the board, who will make final decisions on Sept. 21. More than $3.5 million in cuts will be provided to give the board members options. The list has 70 suggestions including reducing the number of temporary teachers, reducing after-school sports programs, cutting coaching stipends for winter and spring sports, increasing the number of special education students in a class and reducing security on campus. Some items require negotiations, like a salary roll back. Salaries were negotiated before the district knew cuts were required, said Johnson. Teachers and classified staff would have to agree to a cut before salaries can be rolled back. The district is considering changes like working with the College of San Mateo for extra course options rather than cut the seventh period to save nearly $400,000. Board President Marcia Cohn-Lyle offered to cut her $240 monthly stipend until things start looking up.
A budget meeting will be held 7 p.m. Thursday, Sept. 21 at the San Mateo Adult Resource Technology Center, 789 E. Poplar Ave., San Mateo.
- Written by Fiona
Where does one start? We are hearing rumors of budgetary mismanagement resulting in possible programs being cut and jobs lost. We have the 7th period debacle issue, which is cheating the children out of class time. Then we have the dismal API scores, which supports the idea the schools are not doing an adequate job! The EDUCATION ADMINISTRATORS are wanting us to believe they know how to administer a SUCCESSFUL education system, but this belief is not supported by the data! These are the same folk, come voting time, who are going to ask for more money to continue to continue to do a less than stellar job of educating our youth. I say prove yourself? then and only then will I be willing to listen to you for financial consideration. HINT, make your primary goal the mastery of the three R's for all students within the school district!
I would like to remind the EDUCATION ADMINISTRATORS, Burlingame is not your personal Petri dish and the youth of Burlingame are NOT yours to use as some sort of an educational experiment.
Posted by: Rich Grogan | September 02, 2006 at 12:13 AM
Thanks, Heather. Your article answered a lot of my questions. I'm not yet convinced, however, that the budgetary shortfalls were toally unforeseeable....If an 800,000 hit was taken in November 2005(which was several months before the Board voted on the budget) you would think the finance guy would have looked at how that happened (i.e. how could property taxes possibly go down in this market......and if the answer is that hotels put in hardship pleas, you would think he would have explored the whole contingent liabilities a lot more closely...(i.e. asked whether other cases were still pending or whether there was any litigation pending). While it's nice to say it was a "perfect storm" etc. every corporate budgeting process I've ever been involved with has looked at pending litigation and what the outcomes might be on the budget income stream; one gets the feeling here that nothing was looked at...There are still some very hard questions that need to be asked of the SMUHSD and the board. I was especially concerned when I saw that the committee advised against use of property tax increases to fund the 7 period day and the board did it anyway. Why did the committee recommend against it and why did the board ignore the committee? I couldn't find any record of a discussion on that issue.... All I can surmise is that the finance guy is either a "yes" guy who wasn't able to say "no,or he was very successful in convincing the board that there was plenty of money and he was way, way off. Either way, the public needs a very thorough explanation. Trust in the accuracy (and possibly the competence) of the SMUHSD's budgeting process is at issue here and the SMUHSD needs to be forthcoming and thorough in its explanation of what happened if it wants to regain the public's trust.
Posted by: Joanne | September 02, 2006 at 01:36 AM
The hotels and corporations that got their taxes reduced by hardship applications or lawsuits must have received huge refunds if, by the time it filtered down to the SMUHSD, it still amounts to 4.3 million. I don't begrudge them at all the right to hire lawyers and pay as little tax as possible -- that's everyone's right. However, I wonder if they would be amenable to using some of their new-found gain to make a tax-deductible donation to the SMUHSD to get the district through this crisis...Many of the hotels might have some kind of charitable giving program in place each year anyway and a donation to the SMUHSD at this time could generate a lot of goodwill. I'm particularly concerned that newly-hired teachers might be laid off, as this hurt's the district's credibility when it goes out to retain the best and the brightest.
Posted by: Joanne | September 02, 2006 at 01:55 AM
Joanne,
Are you willing to obtain a copy of the corporations that received reduced taxes from the County Recorder? It would be interesting to see how many are in Burlingame. Our hotels are always very generous to our school community.
Posted by: | September 02, 2006 at 04:54 AM
This situation is only related to the tax downturn but has much more to do with financial mismanagment and a lack of ethics.
1. The district knew on July 12 that it did not hav enough money to fund a seven period day yet it hire teachers AWAY from other districts knowing that it could not afford their expense. These teachers may now become unemployed in September as a result of the districts actions.
2. The district knew that it would be $3.5 million in debt but believed that it would have a year to work it out. This means that they would still be cutting programs but keeping the seven period day. The leadership at the SMUHSD didn't think that the County would make them put together a balanced budget by September.
3. The district has been deficit spending for the last two years. It has been experiencing tax revenue reductions for the last two years. It knew that it should not be expanding its programs in a period of declining revenue. (Except that this is the only way it could implement its Academic Core and Seven Period Day.)
4. Sam Johnson is the head of the district. He need to assume COMPLETE responsibility for this action rather than passing the blame off on everyone else.
5. Sam Johnson has been attempting to rearrange the spening of the district for the last two years attempting to implement programs that the public does not want. He did not have backing on the Academic Core and public also turned out against his "Budget Reorganization" in his initial attempt to implement the seven perod day. Does anyone really believe that he didn't know that he was short on funds.
Posted by: guest2 | September 02, 2006 at 08:51 AM
Mismanagement. Is this why Sam Johnson was removed from his job when he was the principal at Capuchino High School? How does one go from being removed as a principal to becoming the Superintendent?
Posted by: Capuchino | September 02, 2006 at 05:47 PM
To Cathryn: Don't you think the issue of who received the story of who received the large tax rebate would be an interesting follow-up for one of our local newspaper reporters? But to answer your question directly, maybe.
Posted by: Joanne | September 02, 2006 at 08:01 PM
Did the other papers (Examiner, Daily News) write about this too? I'm new to the area but it seems like a pretty big deal.
Posted by: john | September 02, 2006 at 10:27 PM
Yes,John, the Examiner had an article yesterday as well and so did the San Mateo County Times. The Times article stated that "the shortfall was expected, but the schedule to balance it was unexpectedly accelerated...'We knew we were going to have to make adjustments to the budget,' said Johnson, but with two years to replenish their coffers, district officials felt no drastic measures would be needed. But in an August 12 meeting with the SM County Office of Education, they were told to slash their operations by September 29, Johnson said." So two more questions arise from this: 1) Why is the public just hearing about this now? and 2) Have all avenues been explored with the County to renegotiate their demands...i.e. maybe a less aggressive plan could be agreed upon with the county and guaranteed somehow?
Posted by: Joanne | September 02, 2006 at 11:15 PM
The 7 period day added almost $2 million in expenditures! The budget shortfalls were known before the school year started and the entire fiasco could have been avoided. The County is using the heavy hand for a reason... they know that Johnson has run deficits for the last two years and they want the SMUHSD in line NOW!
Posted by: guest2 | September 03, 2006 at 05:40 AM
John, welcome to the area and especially the Burlingame Voice. This is a great platform to hear and be heard regarding numerous issues within the area. Again, welcome.
Posted by: Rich Grogan | September 03, 2006 at 06:03 AM