The Healdsburg Unified School District (HUSD) is projecting around a 10 to 15% revenue loss in state aid, as well as a 20% cut in lottery funds and federal title dollars, and while this may seem like a big chunk, the district says it will fair a bit better than districts that rely on state funding.
“You have no doubt read the headlines over the last week about the drastic cuts that many districts are facing. We will be facing some cuts as a result of the loss of revenues that the state will not be giving us next year, but it is nothing that pales in comparison to some of our neighbors,” said HUSD Superintendent Chris Vanden Heuvel. “I have talked to neighboring superintendents, of similar sized districts, who are having to find a way to cut out $3 million.”
He said while the district is happy it’s not in the same place — the HUSD is a basic aid property tax funded district and not state funded — it mourns for what’s going to happen in other districts.
Vanden Heuvel reviewed HUSD’s projected revenue losses at the district’s most recent school board meeting on May 20. The projected revenue loss for the district for 2020-21 is $826,841.
Gov. Gavin Newsom released his May revision of the state budget on May 15 and made suggestions for how education should be funded. Vanden Heuvel said Newsom was suggesting a 10% cut in state aid for schools.
“We are forecasting a little bit higher … between 13% and 15%, just in case. We believe there will be a larger share of cuts that basic aid districts have to incur sort of as a fair share,” he said, noting that the district is going to budget revenue conservatively.
Vanden Heuvel said the district should also be planning for a significant decrease in lottery revenue — monies that are spent on books and materials, from the state as well.
“We’ve got a 20% cut there, we’ll find out more in the coming months,” he said. “Education protection account is another piece of funding that we receive from the state that is associated with basic aid. We put in a 20% cut there and currently it’s sitting at 10% in the governor’s budget, but we want to make sure we can absorb any surprise that may come.”
On the restricted side of the budget, there are more lottery monies, and federal Title I, II, III and IV dollars that are expected to see a dip and the district is projecting a 20% cut for all of these categories.
There is also a projected $100,000 one-year loss of revenue from the closure of the charter school.
Local donations and revenue sources from the Healdsburg Education Foundation (HEF) are also taking a hit this year. Vanden Heuvel said they are projecting zero for that category, taking $458,054 out of the budget.
The total goal from HEF to HUSD programs was set at $351,650 for 2019-20, but only $162,475 was reached.
HEF Executive Director Sally Mackin said in a presentation prior to the budget discussion, “As a seasoned nonprofit executive this is the first time I’ve ever not met a goal, so this has been very hard for me, but we are all dealing with unprecedented challenges.”
Due to the pandemic, three events were canceled where HEF was hoping to use those funds to fill in the gaps for some programs. There were also some events, which HEF was the beneficiary of, that canceled, like the Pigs and Pinot and St. Patrick’s day events.
Because of these circumstances, the following programs experienced a shortfall in funds:
• Paraprofessionals for three kindergarten classes and two for a first grade charter class. The goal was $82,150 and $12,550 was raised.
• Professional development and unconscious bias and trauma informed practices training. The goal was $60,000 and $10,000 was raised, but will be reallocated for HEF operations.
• English learner advisors for high school. The goal was $20,000 and $12,500 was raised to date. $2,500 of that will be redirected to HEF and $10,000 will go to HUSD.
• Tk to fifth grade enrichment. The goal was $62,000 and $25,475 was raised.
“I want to pass on the commitment that we will continue to fundraise, even if we aren’t going to make a firm commitment for a dollar amount for next year,” Mackin said.
Vanden Heuvel said property tax revenue for the coming year is also still an educated guess and a moving target.
“Property tax revenue … is always a wild guess. We look at a number of historic trends, I keep my eye on the development that’s happening around town, etc.,” he said.
Vanden Heuvel said the natural rate has been an increase of 2.5% for the county in terms of property taxes and that is what the county is projecting for next year. Healdsburg has a faster rate and the district is projecting 3.5% for 2020-21.
The total projected loss in revenues is $889,888, but since the state is going to take on more of the CalSTRS and CalPERS pension burden, that figure will be a bit less.
The district projects that it will gain $63,000 from the state contributing to CalSTRS and CalPERS, so the adjusted revenue loss is $826,841 for 2020-21.
“This is based on what we know now and taking a conservative approach. Does this mean positions will be cut? Noo it does not, we can curb spending in other ways. I’m not guaranteeing that we won’t have to cut some positions,” Vanden Heuvel said.
School board trustee Jami Kiff asked how Vanden Heuvel came up with the state percentage revenue loss projection, and he said some of it is taken straight from the governor’s budget, plus a little cushion.
“He (the governor) is projecting 10%, my contacts at the state and everything I have gleaned, is that it likely grows,” Vanden Heuvel said.
Trustee Mike Potmesil said he’s glad the district is taking a conservative approach to the budget.
“We can walk in hopeful, but we also have to be realistic,” Potmesil said. “I think this looks good and I am pleased that it’s somewhat conservative, although I think you could be more.”
While Vanden Heuvel didn’t discuss what budget cuts would have to be made due to the revenue loss, the district plans on bringing back a full budget report at its June 17 meeting.