MBUSD budget avoids layoffs

The Manhattan Beach Unified School District Board of Education has adopted a budget that is drastically different from what it would have been if voters had not approved Measure MB on June 5.

As she provided a budget overview at the board’s June 19th meeting, deputy superintendent Dawnalyn Murakawa-Leopard paused, almost giddily, before the PowerPoint slide that showed the district’s financial projections over the next three years.

“This is a super exciting slide to me,” she said. “Here’s why: because although we are still projecting deficit spending, you can see our ending balance in 2021 is positive, and we are not including layoffs in any of these years. So to me, it’s really great —  for the first time in a long time, I am not having to tell you that when we look down the road we are not looking at cutting our labor force by 50 or 60 people.”

Previously, the district faced a budget deficit of up to $10 million by the 2021-22 fiscal year; now, though reserves will be diminished, the projection is for a $4.6 million fund balance remaining in reserves by the end of that year.

Measure MB institutes an annual $225 parcel tax for the next six years. Manhattan Beach has 13,000 parcels, but about 13 percent are owned by senior citizens, whose homes are exempt. By the district’s conservative estimations, this will mean 11,000 parcels will be taxed (assuming all seniors file exemptions).

“At the moment, we are estimating $2.5 million in local revenue for the next six years, which will really be an amazing help for us and allow us to eliminate the massive reductions that we had been planning up until now,” Murakawa-Leopard told the board. “So that is really great news for us.”

Additionally, the Manhattan Beach Education Foundation is expected to contribute more than $6 million of the district’s roughly $78 million budget. Between those contributions and the parcel tax, Murakawa-Leopard said, the district outlook is the least troubled it’s been for the better part of a decade.

“Those two local funding sources will really allow us to maintain our programs here in the district,” she said.

There remain some dark clouds on the horizon. Student enrollment, which accounts for the bulk of state education funding, has been in steady decline. In 2014, 6,890 students were enrolled in MBUSD; this year, 6,647 were enrolled, a number projected to drop to 6,542 by 2021.

The district is also facing steep increases in the percentage of employees retirement costs it pays to the public employee retirement funds covering its employees, CalPERS and CalSTRS. CalPERS has gone from an 11.7 percent district contribution in 2014-15 to 18 percent this year and a projected 25 percent by 2024, while CalSTRS climbed from 8.8 percent in 2014 to 14.4 percent this year and a projected 20 percent by 2024. Those increases will cost the district millions annually if they come to pass.

Murakawa-Leopard said all these challenges are emerging as the national and state economies continue to expand at almost unprecedented rates —  California this year jumped from the sixth to the fifth largest economy in the world — yet downturns are inevitable and impact education funding. The election of a new governor next year also brings uncertainty. But for now, she said, the district can breathe a somewhat rare sigh of relief regarding its finances.

“We do have these pressures —  a structural deficit, diminishing reserves, declining enrollment, increase costs, all those things are still there, but we have some relief this year,” she said.

Superintendent Mike Matthews, in an interview, said that given how dire things might have been without the success of Measure MB, there is very little not to like about this year’s budget.

How can you not like a budget where we go from predicting over 50 layoffs over the next two years to a budget that has zero layoffs?” Matthews said. “Because of the support of our community for Measure MB, we were able to present our most positive budget in years. From everyone here in MBUSD, thank you Manhattan Beach.”

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