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At the beginning of 2006 school year, the San Jose Unified School District was faced with a $10 million shortfall. But in the last three months, the district has been able to shift funds and cut costs enough to balance its budget for the next two years.
"We had $2 million in savings versus what we had projected," said Ann Jones, the district's chief business officer.
Jones said the district anticipates an additional $2 million savings per year over the next three years.
The district is also counting on the state to help it stay out of the red, a problem that has plagued the district since 2003.
Gov. Arnold Schwarzenegger is proposing to allocate more money to local schools than previously stated.
The district is counting on an additional $5.4 million for the 2006-07 school year and an additional $4.8 million for 2007-08, for a total of $10.2 million from the governor's budget, Jones said.
This funding is integral to helping the district balance the budget without cutting any programs or increasing classroom size, said district board member Pam Foley, who represents Willow Glen schools.
This additional money will also allow the district to maintain its reserves. But the governor's budget has not been approved and won't be until May. If these numbers change, the district will have to make cuts.
"The budget is a moving target," Foley said. "It's like a puzzle that we have to put together. If one piece is missing, we have to cut somewhere else."
Yet the district is optimistic.
The district currently has a 3 percent reserve, Jones said, and is projecting a reserve increase of $8.6 million for the next two years. But Jones acknowledges that the district will need an $8.7 million reserve to carry it through the 2007-08 school year.
In February, the district discussed the possibility of putting a parcel tax on the June ballot to help raise funds to balance the budget.
The parcel tax would have assessed single-family residents $152 per year for the next five years, and raised $10 million a year for the district, said district spokeswoman Karen Fuqua.
But with the proposed increase in funding coming from the governor's budget, the district decided to put the parcel tax proposal on the back burner.
Depending on the final budget in May, however, the district may have to give the parcel tax a second look.
"The budget is very optimistic, but it may not be sustainable," Jones said.
The district could face mid-year cuts if the governor's budget doesn't get passed as proposed, Jones said, which is all the more reason to keep the parcel tax idea on the table.
In addition to reviewing parcel tax measures and increasing the district's financial reserve, the district is in the middle of contract negotiations with the San Jose Teachers Association. If salaries are increased, this will also impact the budget, as will student enrollment numbers. The district will not have the final figures for several weeks, and if numbers differ largely from the projected ones, this will also affect the budget's bottom line.
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