Deficit spending continues to challenge school district

By Neil Nisperos

Staff Writer

CHINO -- The governor's May budget revise may mean more revenue for school district finances, but continued deficit spending continues to harm Chino Valley Unified's financial picture, according to the school district's finance director.

Some $3 billion in revenue for education statewide is expected to help with district cash flow and will allow district officials to hold off on more local cuts until the state budget is enacted for 2011-2012, said Sandra Chen, the district's assistant superintendent of business services.

Despite new revenue in the May revise, officials said the district is projected to continue deficit spending by about $19 million in the 2013-2014 school year. Even with the possible approval of tax extensions to increase revenue, a shortfall of about $10 million is projected in three years, officials said.

The district has been faced with less revenue coming from the state and declining student enrollment.

"What I need to guide all of us is to address this deficit spending problem," Chen said. "If you address that deficit spending problem, your reserve will grow."

Chen said in order to resolve the deficit spending and grow reserves, the district would have to identify a continued revenue source that equates to $10 million or make $10 million in cuts, "so we are close to what we are receiving and expending."

In recent months, the school board reduced a projected $30 million three-year deficit to the $2.3 million shortfall that remained in the district's third interim county report approved last month.

Boardmember Fred Youngblood asked Chen to come back with a projection on when she thought the difference between revenues and expenditures would close.

"I agree deficit spending is not a good thing, but you don't want to kill yourself doing this," said Youngblood.

Boardmember Brandon Blanchard said deficit spending "in any part of life is not good, especially when we're talking about our children's future."

"The district has got to get to a point where the shortcomings are not devastating for us, and the only way is to get some money back in the reserve," he said.

Justine Cunningham, president of the Associated Chino Teachers union, said the board's budget meeting Wednesday was the first time a district official had "really stressed the amount of deficit spending that continues."

Cunningham said employees are asked to help deal with shortfalls through concessions, despite the shortfalls not being the fault of employees.

"It's appearing that no matter how many concessions we give, as long as they deficit spend, they're going to always come to employee groups because of cash flow, and cutting salaries is an easy way to get revenue to pay bills," she said.

"The cuts should be serious, instead of one-time cuts. They're continuing to spend more money than they get for revenue, and once the savings run out, they're going to be deficit spending again."

District officials are expected to return to public budget discussions at a June 22 meeting, after a June 15 deadline for state lawmakers to submit a balanced budget to the Governor. The state budget information will provide further guidance on how the district should proceed financially, officials said.

neil.nisperos@inlandnewspapers.com