Though the San Mateo Union High School District’s fiscal outlook is relatively healthy over the immediate term, the projected threat of a economic downturn is a source of some concern for those managing the school system’s budget.
The district Board of Trustees discussed the budget during a workshop Thursday, May 16, when officials examined a spending plan showing expenditures outpacing income.
While the trend raises red flags, Liz McManus, district deputy superintendent for Business Services, noted a hearty reserve fund will help stave off any potential economic emergency while officials look to identify more efficient spending patterns.
“We have to be a little more fiscally prudent moving forward, that is where the district is,” said McManus.
The high school district is funded primarily by local property taxes which generated an expected $172.6 million, according a district budget report showing spending is expected to reach $175.1 million. A healthy reserve fund with $21 million will need to be drawn down to balance the books, according to the report.
McManus said the district’s spending imbalance is made worse by the lack of state funding available under Gov. Gavin Newsom, who appears less willing to allocate one-time money to school systems than his predecessor, former governor Jerry Brown.
Though the structural deficit exists, school board President Greg Land said officials will not be deterred from spending on programs which they believe can pay great dividends in advancing student achievement.
To that end, he noted the district maintains a $360,000 budget line item dedicated to financing innovation opportunities as an example of officials’ financial commitment to offering students cutting-edge programs.
But he balanced his overall perspective by suggesting a closer examination of existing programs for efficacy is in order to assure the district is getting the most bang for its buck.
“I think it is just being measured in what we want to try,” he said.
The need for fiscal conservatism is fueled to some degree by the threat of an economic slowdown, which could push down the historic amounts of property taxes received in recent years, said Land.
“The economy can turn and that can change things really quickly for school budgets,” he said.
McManus shared a similar perspective.
“You have to be prepared to move if there are changes for how you ride any kind of economic downturn out,” she said.
As officials examine programs to assure the investments are justified, McManus said the hearty reserve fund allows officials to pace themselves and likely avoid any rash decisions.
“We have adequate time to look at things and dig down and look at what we can do,” she said.
Looking ahead, McManus said officials also need to remain wary of the financial burden placed on the district by increased retirement and pension benefits for former employees.
“It’s going to impact school districts more and more as the numbers continue to increase,” she said.
Yet despite the future economic hazards, McManus said officials are disinterested in seeking support from voters for a tax measure which would help balance the budget. She suggested the district is not considering programmatic cuts either. Such efforts can be avoided due to the thoughtful budget development process favored by officials, she said.
“The board is always very fiscally responsible and wants to do the right thing by students and employees,” she said.
Land too said officials will steer clear of ballot measures or cost cuts to balance the budget, noting the district’s financial footing remains much more stable than many other surrounding school systems.
“I don’t think we are in the same positions as other districts,” he said. “I think we are in a much better position.”
(650) 344-5200 ext. 105