by Mark McDermott
The Manhattan Beach Unified School District will need to lay off as many as 60 employees over the next two years due to an anticipated cut to the district’s already drastically lower-than-average state funding.
MBUSD Deputy Superintendent Dawnalyn Murakawa-Leopard gave the Board of Education an interim budget report at last week’s meeting in which she presented projections that show an unavoidable budget shortfall. The difference between revenues and expenses will be either $6.5 million or $9 million, depending on whether voters approve the $2.5 million parcel tax renewal on the March 5 election ballot.
Murakawa-Leopard said layoffs will occur in either scenario. Absent the parcel tax extension, she estimated MBUSD will need to cut 32 positions for the next school year, in addition to six positions tied to one-time grant funding already scheduled to be phased out.
“I do think that’s really important to understand that even in the best case scenario, if the parcel tax passes, we still have a budget issue that we are going to need to address,” Murakawa-Leopard told the board. “But of course, we can’t count on that parcel tax passing because it’s unknown at this point.”
The deputy superintendent had, in recent years, warned of a “financial cliff” the district would likely face. But due to the strange circumstances of this year, when the tax filing deadline was extended to October 16, the state didn’t have a clear picture of its own revenues until mid-November. That picture turned out to be particularly bleak, revealing a 25 percent decline in revenues, which created a $68 billion deficit in the state budget for the coming year. The Legislative Analyst’s Office called this decline “similar to those seen during the Great Recession and dot‑com bust.” For MBUSD, it meant that the financial cliff had arrived, with a much greater precipice than could have been anticipated.
Murakawa-Leopard said that in addition to cutting 32 positions this year, 28 more employees would likely need to be let go the following year, when an $8.1 deficit is projected. Since administrative and classified staff were greatly reduced during the Great Recession, this means that the bulk of those layoffs will likely be teachers.
“This is going to be an extremely challenging process for us to make these reductions,” Murakawa-Leopard said.
Every school district in the state will be impacted, but few more so than MBUSD. Each district will face a huge drop in Cost Of Living Adjustment (COLA) funds from the state.
Last year, the state gave an unprecedented 8.1 percent COLA increase; the coming year’s COLA projections, which were released six months early by the LAO due to the impending crunch, are between 1 percent and 1.27 percent, which is roughly $1.9 million less than what was projected for MBUSD.
According to the deputy superintendent’s report, under the Local Control Funding Formula (LCFF) that determines the largest portion of state funding allocations, Manhattan Beach is 79th among the 79 school districts in LA County. That funding formula was enacted a decade ago with the intention of prioritizing equity in access to quality education, and thus prioritized districts in economically disadvantaged areas. Some key measurements are the number of English language learners and students eligible for reduced lunch programs in each district. MBUSD’s student population ranks last in LA County by those measurements, and as result so does its LCFF funding. Under the LCFF, all districts receive the same Average Daily Attendance (ADA) funding, $5,850 per pupil, but the formula provides widely varying amounts for other funds — resulting in nearby Inglewood receiving an additional $4,489 per student beyond ADA-based funding compared to $132 per MBUSD student and a state average of $1,700 per pupil. The upshot is MBUSD is one of the lowest funded school districts in the entire state.
The upcoming fiscal cliff will exacerbate this funding disparity. While the Manhattan Beach Education Foundation has thus far bridged the gap, each year providing $5.9 million of MBUSD’s total $100 million budget, that amount is not expected to increase, and certainly not enough to account for $6.5 million or $9 million drop in funding. That funding drop will also necessitate the use, in next year’s budget, of all budget reserves except the 3 percent that must be maintained, by state law.
“You can see that our deficit next year balloons to $9 million and then shrinks a little bit to $8.2 million [the following year],” Murakawa-Leopard told the board, running through a PowerPoint graph presentation. “And so we are underwater next year. This cannot happen, obviously. And so we definitely need to make some expenditure reductions in order to remain solvent.”
Murakawa-Leopard emphasized that while the renewal of the parcel tax will lessen the problem significantly, the $2.5 million it would provide will not solve the deficit.
“It will certainly reduce the amount of expenditure cuts that we need to make,” she said. “But it will not eliminate them.”
A citizen’s led ballot initiative last year proposed a $1,195 parcel tax, which would have resulted in $12 million in new revenues per year. But it was resoundingly rejected by 69 percent of voters. The measure on the March 5 ballot closely hewed to the recent surveys of local voters that showed they were unlikely to support anything beyond the $225 Measure MB parcel tax approved by voters in 2018. Hence the new ballot measure, as yet unnamed (see accompanying story), proposes the same $225 per parcel tax and $2.5 million in overall revenues as Measure MB, which ends this fiscal year.
If the parcel tax fails to pass, a total of 60 positions will be eliminated, in addition to the six already slated for elimination. If it passes, that number could be lessened by perhaps a third.
“Clearly, if the partial tax passes, it will help tremendously,” said board member Bruce Greenberg. “It doesn’t solve the entire problem. And because of the uncertainty of partial tax renewal, we have to budget conservatively.”
About 400 teachers work within MBUSD. Reducing that number, board member Wysh Weinstein said, will have inevitable impacts in every classroom.
“It’s important for the public to understand when you’re looking at FTEs [Full Time Equivalents, the budgetary term used for employee positions]. Generally that means class sizes are going to go up,” she said. “That’s how that math plays out in most situations.”
“One thing I would like to add because it’s bleak and ominous and dreary just to be talking about the reduction of personnel, but I think now that we have these numbers, we’re going to have to scrutinize every contract and every expense, from the conferences to the extra contracts that we’ve approved, to really determine is this necessary now? And is this necessary in the future?” board member Jen Fenton said. “…I think now’s a really good time for us to be stingy.”
The upcoming timeline is also daunting. Assistant Superintendent Tom Stekol told the board that the human resource department would need to prepare pink slips by the February 28 board meeting in order to issue them by the March 15 state deadline. Murakawa-Leopard noted that the district may not have a clear idea of whether the parcel tax has passed by that time, because the election certification deadline is not until April 4. Governor Gavin Newsom will release a draft budget in January, but the key “May Revise” will offer a more accurate rendering of what the final budget will look like. The State Legislature has until June 15 to send a budget back to the Governor — a deadline it does not always make, regardless of the law — while MBUSD will need to approve its own budget by June 22. Murakawa-Leopard told the board that the district needs to make decisions at several points before it has “the final information about what our circumstances are going to be.”
“So it’s very challenging,” she said. ER
