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Orange County school districts are working to lower their 
financial obligations next year by as much as $158 million, a 
cost-cutting ax expected to fall largely on employee salaries 
and benefits after years of class-size increases and program 
cuts.

Eighteen of the county's 28 school districts have reported 
needing to rein in costs in 2013-14, even after California 
voters approved Proposition 30, which guaranteed additional 
funding for schools. Prop. 30 will hold school funding levels 
steady, taking off the table even deeper spending cuts Gov. 
Jerry Brown had previously threatened.

"The problem is that with Prop. 30, a lot of people are thinking 
that schools are in great shape," said Orange County schools 
Superintendent Al Mijares. "What Prop. 30 did was to prevent 
further cuts."

Even with Prop. 30's passage, O.C. school districts reported 
they expect to spend as much as $65 million less in 2013-14 than 
the $4.3 billion they're on target to spend this year.

And districts have projected the cost-cutting must go deeper. In 
December, districts reported needing to slice $158 million from 
their 2013-14 financial obligations, as they deal with expiring 
employee pay cuts and rising operational costs, including higher 
utility bills and swelling health insurance premiums.

School districts, though, say they expect their preliminary 
spending estimates to change in the coming months. Although all 
districts were required to file an initial spending plan with 
the county on Dec. 15, at least one district � Garden Grove 
Unified � reported its spending estimates were based on the 
assumption Prop. 30 would fail at the ballot box, triggering 
deep funding losses.

Garden Grove, which had projected the biggest spending cuts of 
any O.C. district, will issue revised figures next month, said 
spokesman Alan Trudell.

YEARS OF PAY CUTS

Cuts to student programs and services are for the most part not 
being considered for next year; instead, many districts are 
pursuing negotiations with their labor unions to reduce pay and 
benefits, often for the second or third consecutive year.

Two O.C. districts � La Habra City and Fountain Valley � already 
have agreed to cut five days off the 2013-14 school year, 
continuing the shortened 175-day student calendar they and six 
other districts implemented for 2012-13. The mandatory furlough 
days save the district money by reducing employee pay.

Others have reported they're still negotiating for worker 
concessions, including shorter school years and shifting more 
health insurance costs to employees.
"Everyone has had to feel the pain, and I have to give a lot of 
credit to employees for realizing we're in an emergency 
situation," Mijares said. "I know that doing it time and again 
does become frustrating, and I hope that we get to the point at 
the state level where it can be fixed."

No O.C. districts have indicated they're planning to notify 
permanent employees of possible job losses in 2013-14. About 638 
temporary employees working on one-year contracts are expected 
to receive non-renewal warnings, but most of them typically are 
rehired each year.

In December, 10 O.C. school districts filed preliminary spending 
plans with the county indicating they might not be able to meet 
their financial obligations over the next two years. A year ago, 
in December 2011, nine districts reported similar financial 
jeopardy.

These tallies are drawn from Register surveys of the county's 28 
school districts, which filed preliminary 2013-14 spending plans 
in December.

PAY RAISES CONTINUE

For teachers and other school workers who take salary 
reductions, their lost wages are partially offset by automatic 
annual step-and-column raises that boost pay for additional 
years of service and advanced degrees. The raises cost districts 
millions of additional dollars each year, and most districts 
have continued to award them.

This year, just two O.C. districts � Placentia-Yorba Linda 
Unified and Capistrano Unified � delayed awarding teachers step-
and-column raises, by eight months and six months, respectively.

Step-and-column raises typically represent about a 1 to 2 
percent annual increase in a district's payroll costs.

School officials say step-and-column raises are a small but 
important way to recognize teachers and other workers for their 
continued years of service to the district and for pursuing 
advanced degrees and credentials.

That monetary recognition is particularly critical as teachers 
grapple with increased class sizes and fewer support staff, 
Mijares said.

In Orange County, only five school districts have a program in 
primary grades that caps the number of students at 25 or fewer. 
Five years ago, a 20-to-1 student-teacher ratio was common in 
first- through third-grade classrooms across the state.

Among O.C. middle schools, caps on average class sizes have 
soared to as high as 35.9 in Saddleback Valley Unified and 36 to 
39 in core academic subjects in Placentia-Yorba Linda Unified. 
The smallest middle-school class sizes are in La Habra City, 
with an average of 30 students each.

Among O.C. high schools, caps on average class sizes have grown 
as high as 38 in Brea-Olinda Unified and 36 to 39 in core 
academic subjects in Placentia-Yorba Linda Unified. The smallest 
high school class sizes are in Fullerton Joint Union High, with 
a 28.5-student average.

CAUTIOUS OPTIMISM

Financial uncertainty for school districts continues to loom, 
although experts are cautiously optimistic the outlook might 
improve in the coming months.

In January, Gov. Jerry Brown unveiled a state budget plan that 
proposes to give schools an estimated 1.7 percent increase in 
their per-student funding for 2013-14.

And the state's revenues for January were up $4.3 billion above 
the governor's estimates, a figure that school finance experts 
say could bode well for school funding if the trend holds up.

"It signals that California may be entering an era where we can 
govern outside of crisis," State Controller John Chiang said in 
a statement Feb. 8.

"However, given our state's troubled history with boom-or-bust 
revenue cycles, this good news must be tempered with increased 
fiscal discipline in how we interpret and budget January's 
collections."

Chiang cautioned that the state's January windfall might be a 
one-time bump triggered by high-income taxpayers who declared 
their income and dividends to avoid higher 2013 tax rates.

School districts will file an updated preliminary spending plan 
for 2013-14 in March, and final spending plans in June.

Contact the writer: 714-796-7802 or smartindale@ocregister.com 
or Twitter: @MartindaleScott

http://www.ocregister.com/news/districts-496280-school-year.html

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