By Niki Cervantes
Staff Writer

May 13, 2015 -- With its fundraising goals coming up short and its costs exceeding its revenues, the Santa Monica-Malibu Unified School District is facing at least a $7.4-million budget shortfall in the upcoming 2015-2016 school year.

Estimated expenses total almost $102.4 million for the upcoming fiscal year, according to Janece Maez, associate superintendent for business services for the district.

Total revenues are about $94.9 million, down from $98.5 million in the current year, she said.

A spokesperson for the district cautioned that the deficit, revealed in a recent “first look” budget workshop, is far from final.

SMMUSD’s “final budget will be balanced,” said Gail Pinsker, the District’s spokesperson.

How the district can achieve that is a question still far from resolved, District officials acknowledge.

Big increases in the cost of Special Education and employee benefits, as well as other costs associated with staff are helping to drive up spending, officials said.

In two different retirement categories, spending increased by a total of $1.4 million, according to the district’s outline of expenses.  Health benefits increased another $1 million, while a hike in workers’ compensation rates is extracting another $1 million.

SMMUSD Board Member Oscar de la Torre said the district is concerned.

“It’s a lot of money,” he said. “We need to make smaller cuts early rather than big cuts later.”

But the district is walking a fine line as it attempts to maintain the quality of its educational programs while keeping costs under control, de la Torre said.

“We need to strike a good balance,” he said.

De la Torre believes the district shouldn’t use some of its estimated $3 million in reserves to help decrease the deficit.

Although he did not name specific cuts, de la Torre said reductions could be made in administration – “someplace as far as possible from the classroom,” he said.

The district, he added, is seeking to avoid the severe cuts of previous years, when the economy was still in deep recession and the district was reeling from State cutbacks. In those days, employees were hit with furloughs, he recalled.

Salaries and benefits for employees are a sensitive topic because they are overwhelmingly the biggest part of the budget’s expenses. This year, salaries and benefits totaled almost $85.9 million. This coming fiscal year, they are expected to total $89.6 million, or a four percent increase.

Meanwhile, enrollment is due to dip slightly, from 11,295 students this year to 11,173 in 2015-16.

De la Torre said the district will continue grappling with the budget between now and June. The budget’s fiscal year ends June 30.

News of the deficit comes at a time when outside fundraising for Santa Monica schools is on shaky ground.  The Santa Monica Malibu Education Foundation has raised only $2,235,167 – far short of the $4 million goal, officials said. (Santa Monica-Malibu School District Fundraising Still Short of Goal, May 7, 2015)

The foundation provides services that sometimes go unfunded because of State cutbacks. It pays for instructional assistants, literacy coaches, elementary arts education and some secondary school faculty members, teacher training and enrichment for arts, science, technology, engineering and math.

The foundation has until the end of the fiscal year to meet its goal.