OUSD Outlines Possible Harm of Proposed State Budget Cuts

By J. Douglas Allen-Taylor
Friday February 01, 2008

Saying that “the governor dropped a bombshell on the education community,” Oakland Unified School District interim Chief Financial Officer Leon Glaster painted a gloomy picture Wednesday night of the potential financial effects on OUSD of Governor Arnold Schwarzenegger’s proposed 10 percent across-the-board budget cuts.  

The governor’s proposal was his initial response to the deepening national recession that has lowered California’s state income. If the 10 percent state budget cut actually becomes necessary, state legislators or the governor could eventually spread the reductions to hit different parts of the budget at different rates. But among the details Glaster outlined if the 10 percent state education cuts actually go into effect are: 

•1 percent required planned decreases in the current (2007-08) budget could mean a $1.067 million cut to the current OUSD budget by June. 

• The governor’s proposal would lead to a $15.6 million cut in the OUSD general fund budget in 2008-09, with a total budget reduction in excess of $22 million. 

• The governor’s proposal requires all unexpended school district 2007-08 categorical funds be sent back to the state if not spent by June 30, setting off a potential scramble of local spending to keep from losing that money. 

• The governor is proposing delaying the state Average Daily Attendance (ADA) payments to local districts from July 1 to September 30, meaning OUSD would either have to dip into its own reserves to pay its bills during that period, losing the interest income that money would earn the district, or take out a short-term loan to make up the difference. 

Board members, figuring out how to pay back the $100 million state loan that surrounded the state takeover of OUSD five years ago, immediately balked at any plan to take out new loans, and Board President David Kakishiba said that any such plan would need to be carefully considered and discussed in detail before being put into place. 

Meanwhile, Glaster told board members that on March 12, his office will do a “detailed analysis of what the governor’s proposal will do to the OUSD budget.” 

And OUSD state administrator Vincent Matthews said that on the issue of the loss of unspent money this year, he was meeting with district principals on Thursday (yesterday) “to appraise them of the budget situation and devise strategies for them to spend the money by June.” 

Under the bifurcated OUSD rule—in which board members have only regained local control of certain portions of district operations—the state administrator’s office retains complete authority over all district budget matters. State administrator Matthews, however, appears to be consulting board members on budgetary issues.