Budget brings $700k

Budget brings $700k

Gilroy
– A $2 million projected surplus over the next two years for the
Gilroy Unified School District is good news, but it also means
figuring out where the extra money should go – and realizing it
actually doesn’t go very far, according to district officials.
Gilroy – A $2 million projected surplus over the next two years for the Gilroy Unified School District is good news, but it also means figuring out where the extra money should go – and realizing it actually doesn’t go very far, according to district officials.

Gov. Arnold Schwarzenegger’s proposed budget means a projected $700,000 surplus for next year and a $1.16 million surplus the year after that.

With the projected surplus, the district now will look at its priorities and decide where to funnel the extra money. At the top of the list is workers’ compensation, which cost the district $1.8 million in 2004. By reducing the number of workers’ compensation claims, more money would be available for other purposes, such as giving district employees raises or more help paying for health benefits.

This year, the district will spend about $12.5 million on employee benefits, and health industry costs are expected to jump anywhere between 10 and 18 percent next year. With an 18-percent increase, the district would have to shell out $1.1 million more than it is now for health benefits alone. Even a more conservative estimate of 13 percent would cost the district an additional $806,000.

“We’ll continue to try to be efficient with what we have,” said Steve Brinkman, the district’s assistant superintendent of administrative services. “What we’re seeing is that even a $700,000 surplus doesn’t go very far when you consider everything it has to cover.”

About 60 percent of GUSD teachers have health plans with Kaiser Permanente, which saw a 14-percent increase in health plan costs last year. Other providers experienced even greater jumps, such as a roughly 30-percent increase for Blue Cross and Blue Shield. The district should know exact increase projections for next year by the end of April.

The district is required to submit next year’s budget to the state by the end of June. The state, however, doesn’t provide its budget until the end of July at the earliest, making it difficult for the district to negotiate with teachers and finalize a budget, said GUSD Superintendent Edwin Diaz.

The projected surplus exists for a couple of reasons. While the district had budgeted a 2.7-percent adjustment for the costs of living, the governor budgeted a 3.9-percent adjustment, leaving the district with 1.2 percent more in the general fund. The governor also proposed to provide about 1 percent more than the district had planned on to reduce the deficit.

The bad news for GUSD came in the governor’s plan to redistribute funding for teachers’ retirement plans. Currently, teachers contribute 8 percent, the district contributes 8.25 percent and the state contributes 2 percent.

Under the governor’s proposal, the state would contribute nothing and the district would bear the 2 percent the state pays now. The district would have the option to negotiate with teachers to pass on the increased contribution, but it’s unlikely that would happen.

Another direction the $700,000 could take is in reducing class size, but district officials said that also seems daunting.

The district’s kindergarten through third-grade classes each have an average of about 20 students, as part of a state incentive program that encourages small classes in those grades. In fourth and fifth grades, class sizes swell to an average of 32 students. Classes in the middle schools and high school average about 31 students.

Reducing class size would translate into the need for more teachers but the same amount of available dollars to pay them. The gap could be filled by employees who currently provide support in the classroom for teachers, such as teacher aides and translators. But using those employees to teach classes would leave current teachers without that valuable classroom support.

Additionally, reducing class size would create a need for more classrooms, and there’s simply not enough space for that. The district is projecting an enrollment total of 9,775 students next year and 9,800 students in 2006-07. This year’s enrollment is 9,679 students.

“We’re scrambling to find places to put the students we already have next year,” Brinkman said.

In the next few weeks, the district’s board of education will continue working with district staff to make a list of priorities to decide where the projected surplus should go.

“There are no magic answers here,” Diaz said. “We are very, very tight.”

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