State Budget Crisis

Frequently Asked Questions

We want to share brief answers to some of the questions we’ve received. With some questions, you will be directed to additional Web pages, or links, where more detailed information can be found.

1. Generally, what are EUSD’s revenues and expenditures?

When it comes to funding, Escondido Union shares a school finance system with every other California school district. Essentially, the decisions about revenues for schools are made in the state capital or in the United States Congress. About 85% of Escondido’s dollars are from the state and about 15% of the revenues are from the federal government.
The revenue comes from:

taxes paid to the state and federal governments
local property taxes
local and state school bonds
a small amount of miscellaneous local income, including developer fees
approximately 1 to 2 % from the California Lottery
To see graphs, click here

2. How much money does EUSD actually receive, per pupil, from the State?

In the 2007-2008 school year, EUSD receives $5,575.75 per student, if the student attends all 180 days of school. The amount is reduced by $30.97 for each day a student is absent. Not all school districts receive the same level of funding from the State of California. EUSD’s revenue per student is less than the state average of over $6,000. The formula for revenue funding was determined over 25 years ago when Escondido was a rural community. Although adjustments have been made by the Legislature toward equalizing funding of school districts, total allocations still have not given Escondido Union equal funding when compared to other districts in the state.

Sometimes the Governor refers to a revenue figure of $11,000 per pupil. This is the total revenue amount for educational programs, some of which are not a part of the K-12 public education system. This total revenue amount includes the K-12 funding, but also includes state building projects, capital outlay, debt service, and non-school programs operated by the public schools such as adult school, education for prisoners, and child care. (EdSource, November 2004).

3. How does this compare with other states?

California ranks 46th in the nation in per pupil funding, down from 43rd just two years ago (Education Week). This is nearly $1900 per pupil BELOW the national funding average. If the Governor’s proposed budget passes, California is projected to drop even lower -- to number 48. If Escondido Union were funded at the national average of per pupil funding, our district would receive approximately $54 million in additional funding annually. Click here to see more how California’s funding compares.

4. How much has the Governor proposed to cut from California’s public schools in 2008-2009?

A 10% cut to all school district general fund budgets
A 6.5% cut to: Special Education; Class Size Reduction; Instructional Materials; Home to School Transportation; Supplemental Instruction; Supplemental School Counseling; Career Technical Programs

5. Translated into dollars, what does this proposal mean for EUSD?

The 2008-2009 EUSD Budget must be reduced by $11.1 million (as of 3/5/08) because of:

The Governor’s proposed reductions = $6.7 million
The inherent increased costs of doing district business (ie: utilities, insurance, materials) = $4.4 million. This includes an additional projected loss of $1 million due to anticipated declining student enrollment.

6. How much has the district already lost as a result of actual declining enrollment?

Over the last 5 years the district declined by 1018 students. This resulted in a loss of over $10 million in revenue. The district has reduced staffing, but has also had to significantly reduce operational costs. Escondido joins 51% of other school districts in the state of California that currently have declining student enrollment.

7. Do all of California’s public school districts receive the same level of funding?

After the passage of Proposition 13, a new state school funding model was implemented. Formulas developed then defined districts as “low wealth, average wealth, or high wealth.” These formulas, with some adjustments to move towards equalization of districts, are used today. The formulas remain, even though a community may have demographically changed dramatically from 25 years ago. Most school district’s funding levels in California range between $5,000 and $8,000 per student.

8. Will all school districts have to make cuts then, if the Governor’s proposed budget is adopted?

ALL public school districts across the state will be adversely affected by this proposed budget. However specific cuts, and the depths of them, can vary from district to district. In EUSD, our declining enrollment has already necessitated our cutting over $9 million dollars from our budget over the past 4 years. Therefore, some cuts that other districts will now be making, EUSD has already made in prior years. Whereas we always try to keep the cuts as far away from the classroom as possible, we have sadly reached a point where that is no longer an option.

9. What then are you proposing to cut in EUSD for the coming year?

While the superintendent and cabinet presented initial recommendations in February and March, no final decisions have been made. Since that time, a district “Budget Communications Committee” has been set up to gather input from representatives from all sections of our school district. (Click here to find agendas and minutes of their meetings). Our superintendent, Jennifer Walters, has also received many cost-savings suggestions from employees and community members. The board continues to have extra meetings and workshops to discuss this critical issue. (Click here to find their agendas and minutes.) The school board will give final direction for budget reductions to be made in April and May. A preliminary 2008-2009 budget will need to be adopted in June.

10. If no final decisions have been made, why have you sent out “pink slips” to 145 teachers, 10 Assistant Principals, and 10 counselors, while preparing to send out even more to many classified employees?

The law dictates notification timelines for certificated, classified, and management employees. We must notice all employees who may lose their jobs if this proposed State budget is passed. Unfortunately, we must “plan for the worse and hope for the best” since we will not know exactly how much we will actually receive from the state until they adopt their budget later this summer.

11. Why doesn’t the district just wait until after the State budget is passed to adopt EUSD’s budget? Wouldn’t that make more sense? By then, the district would know the exact funding it will actually be receiving.

We wish we could. Unfortunately, State law requires school districts to adopt their budget for 2008-2009, by June 30, 2008, -- which is, ironically, BEFORE the State even passes their budget. The State is supposed to pass their budget by July 1st of each year. However, historically, they are often late in doing so, and there is no penalty to them for being late. In many prior years the State budget has not been passed until late July or August, which presents an enormous challenge for school districts, even in more economically favorable times.

12. I’m confused... I thought when we voted for Proposition 98 that schools would receive a guaranteed level of funding each year, to avoid this type of budget crisis. What happened?

Despite the fact that the voters approved Proposition 98 nearly 20 years ago, and overwhelmingly reaffirmed their support of it again in 2005, there are provisions which enable the State Legislature and Governor to “suspend” it. Regrettably, a suspension of Prop. 98 not only hurts California’s students, it also undermines the will of the voters. Click here to learn more about Prop 98.

13. It seems like the State often makes dismal projections but, by the time the budget is actually passed, revenues come in quite a bit higher than expected. Couldn’t that happen this time?

While we would hope that will be the case, many believe that this year is much more worrisome. The fact that the overall economy is also struggling, is a serious reality. Click here to find an informative analysis of what is causing added concern this year.

14. Well, what about the Lottery? Can’t it help us with this budget crisis?

Unfortunately, the Lottery brings in a relatively small percentage of our district’s revenues -- between 1 and 2% of the overall budget. Since lottery revenues can vary tremendously from year to year, we are cautioned to avoid using lottery funds to cover on-going expenses such as the costs of employees, or instructional programs, which need to be sustained. Lottery dollars are better spent on one-time expenses since we cannot be guaranteed they will be there, nor in what amount, from year to year.

15. How about EUSD’s reserves? The State only requires you to have 3% set aside for economic uncertainties, yet the Board always strives to maintain 4.75%. Why don’t you just drop to the minimum 3%, and then use this money to help out during the current budget crisis?

Were the district to “spend down” to the bare minimum in reserves, it would be seriously jeopardizing the financial health of EUSD. Reserves are one-time dollars that have a limited function, and are not designed to balance a budget, since the dollars would not be available in successive years.

First of all, the little extra “cushion” is intended to weather any unforeseen storms that lie ahead. Additionally, there are times when some money is temporarily transferred internally from this fund, to cover expenses in another fund whose revenues might be late in reaching the district from the state. The district’s “reserve for economic uncertainties” is relied upon to cover both short- and long-term financial obligations.

Secondly, this current economic downturn could bring the need for even more devastating cuts in 2009-2010, when the only extra money available to us might be those relatively dollars in this reserve account.

Lastly, dropping below 3% has serious consequences for any school district. When a district drops below the bare minimum, it becomes what is known as a “qualified” district. As such, it is then forced to relinquish any and all local control, and an outside entity is assigned to assume total control of the district’s budget.

The district has some reserve funds for specifically approved purposes required by the state, such as the required 3% district contribution to a deferred maintenance fund. The state requires this set-aside of dollars to ensure safe and secure facilities and to deal with any large capital improvement emergencies.

The district has set-aside some additional reserves in order to fund high priorities established by the school district’s board of education. Three examples of special reserves would be a fund to assist with declining student enrollment, the fund to pay health benefits of retired employees, and a special fund to support technology throughout the district.

16. I read where the Governor is proposing a 4.94% COLA for 2008-09, even with all of the proposed budget cuts. Won’t his help?

While he has recommended funding a 4.94% Cost of Living Adjustment, he is simultaneously proposing to make a 10.6% cut to public education, which obviously results in a large reduction to public education’s overall budget. Thus without legislative intervention, school districts will be left with a “negative COLA” for the 2008-2009 school year, forced to run the school systems with less dollars than they have in the 2007-2008 school year.

17. Do employees receive the full COLA in their salary raises?

While the name -- Cost of Living Adjustment -- could lead one to believe that it is intended to be used solely for annual employee raises, that is not the case. COLA’s are provided to help school districts meet ALL of their increased costs for the coming year (ie. increases in electricity and water rates, workers compensation insurance, health benefit increases, etc.), as well as employee salaries. A better term for what is known as COLA, would be the “Additional Cost of Doing Business.”

18. Couldn’t we sell one of our smaller schools and have their students attend other schools? Then, we’d have several million dollars to help us with this budget crisis. Is this being considered?

Not at this time. While a few of our schools are smaller than others, none of themhave student enrollments low enough to make that feasible. Transportation would become a new regular education cost to the district, in that students would have to attend a school other than their neighborhood school. Additionally, any money generated from the sale of a district property must be used on district facilities. Therefore, proceeds from a potential sale of district property would not be able to be placed into the general fund, or used to maintain programs and/or employees.

19. When will we know the final state budget and how it will impact EUSD?
We may not have a final state budget approved until fall 2008. School districts must build their budgets based upon the Governor’s January recommended state budget, and approve their budgets by June 30, 2008. The state has been known to debate well past July 1, and sometimes into the fall. This makes it extremely difficult to plan for the next school year, and leaves employees who are at risk of layoffs, and students who are at risk of cut programs, not knowing of their destiny until a state budget is passed.

20. Hearing all of this, PLEASE tell us.... What can we do to help?

If you would like to make your opinions known to your elected representatives in Sacramento, regarding their upcoming votes on the proposed cuts to education -- or regarding any other issue which lies within their jurisdiction -- you will find some sample “TIPS FOR COMMUNICATING WITH LEGISLATORS”, as well as “CONTACT INFORMATION” by clicking on the titles above or here).

We hope this information has been helpful. On behalf our our 18,800 students and nearly 2000 valued employees, we sincerely thank you for your concern and support.

Superintendent's Message

State Budget Crisis

Superintendent's Message, Spring 2008

About Our District

Impending Budget Reductions

EUSD Potential Reductions

Tips for Communicating with Legislators

Other Important Resources

Frequently Asked Questions