Reasons for San Luis Coastal school district's $9 million deficit are plenty

San Luis Coastal trustees must decide how to cut $9 million — or 12 percent — from the school district’s budget next year as it faces the largest deficit it has seen in at least 10 years.

Larger class sizes for elementary students, fewer summer school courses and fewer teachers are expected as a result of the looming cuts.

A list of options for reducing San Luis Coastal Unified School District’s $74 million budget was presented to the school board last week. They range from not replacing 15 retiring teachers, postponing computer upgrades and new textbook adoptions and cutting by 15 percent school improvement funds, which are used for a variety of things such as assemblies and after-school enrichment classes.

The district faces the largest deficit of all San Luis Obispo County schools this year — in part because it has relied on reserve money in past years, Superintendent Ed Valentine said. As a result, until this year it has not had to cut programs as deeply as other county school districts.

Contributing factors to the district’s $9 million shortfall include a $3.4 million deficit that will carry over, $1.5 million in one-time federal bailout money that will disappear next year, $2.5 million less in state funding and anticipated program cost increases of $1.8 million.

Although its $20 million reserve fund is still above state minimum, district officials want to keep it hefty to prepare for future lean years.

The district, which has 6,900 students, is the third largest in the county, with nine elementary schools, two middle schools and two high schools.

San Luis Coastal, commonly called a basic aid district, is funded mostly through local property taxes. It only receives state funding for programs that provide support for low-income students, transportation, health education, physical education and the arts.

The school district has benefited from Pacific Gas and Electric Co.’s property tax contributions involving Diablo Canyon nuclear power plant.

Paso Robles and the South County’s Lucia Mar school districts by comparison rely upon a combination of property taxes and backfill from state funds to reach a certain limit. State cuts to the other districts have led to teacher layoff announcements and program reductions.

In March, the San Luis Coastal school district did not renew 70 temporary contracts, mostly held by teachers. Valentine said the district will renew as many contracts as it can but will not know how many until the state budget is finalized this summer.

“The goal of these budget cuts is to save as many jobs as we can,” Valentine said. “We don’t want to reduce ongoing staff other than not replacing retirees.”

Individual schools have already felt the impact of the budget shortfall. School administrators were recently asked to cut 20 percent to 30 percent of their program budgets, said Russell Miller, assistant superintendent for finance.

“There is still so much that is unknown,” Miller said. “But we do know that the next school year will be worse than this one, and most districts are left cutting into the bones now, and there just isn’t that much more left to give.”

Valentine said the district’s deficit may grow but no one is sure by how much until the state budget is released.

“The budget will be a major focus between now and June,” Valentine said.

The trustees have until June 15 to make the cuts.