Cash-strapped School District to Get Double Windfall

By Teresa Rochester

In early May, Santa Monica teachers and community members flew kites along the Pacific Ocean's shore in solidarity with their statewide counterparts who descended on Sacramento to call for increased spending for public schools. In a room above the Sacramento crowds, Governor Gray Davis, a handful of powerful elected officials and heads of the teachers union met quietly behind closed doors.

The result of that meeting and subsequent negotiations: A potential $1.84 billion windfall for California's public schools -- once the envy of the country in terms of state spending but now floundering near the bottom of the heap.

In Santa Monica news of the cash infusion came days after the city released its proposed $315.9 million budget, which taps education as its biggest beneficiary with $2.237 million in city funds. The potential influx of state money was greeted with cautious optimism by district officials and left at least one City Council member wondering how the state money will effect the city's potential gift.

As budget hearings got underway Tuesday night, Councilman Paul Rosenstein questioned whether or not the city should earmark such a large chunk of money to the school district. Rosenstein questioned whether the city -- which made education its top priority in January, after the district narrowly averted a multi-million dollar budget shortfall -- should use its money for other needs since the school district stands to receive $3.8 million from the state.

"We decided ... to allocate $2.1 million to the school district," said Rosenstein. "Now it's my understanding that with the amount of money [from the state] covering the shortfall, I'm just wondering if we should get a sense of how the council would like to handle it. It seems to me the crisis situation is abating. We should see what other needs it [the money] may be redirected in the district."

City Manager Susan McCarthy told the council that she had already discussed the situation with Supt. Neil Schmidt. The city's proposed budget calls for the money to help support a fundraising effort for the district's music and art programs, supplement district programs such as Enhace, subsidize childcare and infant care and transition support for Marine Park Childcare.

The budget also states that the city has the opportunity to designate up to $1 million in one-time funding, which the district could use to fatten its bare-minimum reserve. The proposed money would supplement the $4.9 million the city already gives to the district.

"We suggested to the superintendent that he and the Board [of Education] should look at what alternative uses there may be - one time uses - because that's what this is. I'm sure we'll be hearing from them in upcoming weeks."

Last week, Schmidt said he was pleased with the state's announcement but cautioned that it would only go so far. The final amount, he said, depends on several factors, including the state's final budget in June and the district's final enrollment numbers, which will be tallied in September.

"What they [the state] are proposing is excellent," said Schmidt. "That's great news, however, what it allows us to do, it doesn't address our unmet programmatic needs; for example librarians and counselors in all the schools. Those things don't get addressed by the state. The city funds are a one-time funding source, so you can't use one time money for on-going programs."

The state's billion-dollar windfall is payback for the recession years of the 1990's, which saw the cash-strapped state legislature hold back unrestricted funds legally earmarked for public schools. With the state in the middle of an economic boom, the legislature's leadership led by Assembly Speaker Bob Hetzberg (D-Sherman Oaks) signed up Davis to support the $1.84 billion boost to schools instead of holding onto it.

The money is not just a one-time deal either. The extra cash will become part of the yearly funds budgeted for schools.

Along with the billion-dollar boost, the legislature also increased the state's cost of living adjustment. The district's Assistant Superintendent Art Cohen, who oversees district financial matters, said last week that in the state's proposed budget released in January, the governor had called for a 2.84 percent COLA increase. The "May Revision" budget calls for an increase of 3.7 percent.

Cohen said the increase will result in $175,000 more in COLA money along with the anticipated $3.8 million.

As for the city's $2.1 million, Beth Muir, president of the Santa Monica/Malibu California Teachers Association, said that ultimately the decision is up to the council but that the state's proposed funding is a boon.

The California Teachers Association played an integral role in the deal forged by Hertzberg. The CTA agreed to ditch a planned November ballot initiative that called for state per student funding to be raised to the national average in exchange for the $1.84 billion.

"It's up to the city. Of course they may continue what they've done in the past or they may pull it," said Muir, referring to the city's yearly grant to the school district and this year's proposed city money. "With economics you have good years and bad years and that's what's happened."