State Budget Cuts Projected to Bypass District

“Basic Aid” Status Could Counteract Effect of Cuts

Due to California Governor Arnold Schwarzenegger’s proposed $4.8 billion budget cuts, the 2008-2009 school year funding for the MVLA School District will likely be reduced by about $802,000.

This will result from a state-designated 6.5 percent cut in categorical funds, which are restricted to specific programs such as English Language Development and special education, as well as a 2.4 percent cut in general fund revenue, which is state aid for use at the district’s discretion.

However, because the district is in an area where the local property taxes exceed the require state funding amount, it qualifies for what is known as “basic aid.” Also known as “excess revenue,” the district’s “basic aid” status allows it to keep extra income that is above the required funding amount. Most “basic aid” schools are located in affluent areas such as Los Altos.

Because the district is located in a community that attracts wealthy prospective homeowners, the money received through “basic aid” has historically increased. As a result, property tax revenues in our area should likely increase by around $1,994,383 in 2008-2009, which will counterbalance the money lost due to the government’s budget cuts.

“Fortunately, we are in an area that continues to appreciate in property tax revenue, which will go up about six percent,” Superintendent Barry Groves said at a PTSA meeting on Tuesday, March 4. “We’re not going to have much program enhancement, but right now we’re actually in an enviable position.”

The budget cuts, which would greatly hurt the district if it were not in such a prosperous area, are being proposed because Schwarzenegger wishes to alleviate some of the $14.5 billion state budget shortfall.

“They have a structural deficit, created by long term borrowings and other one-time infusions of monies, that has never been fixed,” Associate Superintendent of Business Services Joe White said in an e-mail. “Current year revenues are [also] falling considerably short of their projections.”

Yet unlike many school districts, which will suffer without basic aid income next year, the MVLA district should be able to keep the same staffing levels and avoid increasing class sizes and cuts to various programs, according to Groves.

Although budget cuts will affect every school, the money lost due to budget cuts will not be constant from district to district; the amount cut is based on the number of students in the district and their average attendance record.

More information regarding the 2008-2009 budget for the district will be available in mid-May, including the slight chance that the cuts will not happen due to a split legislature and public disapproval.