Sacramento City Unified Board of Education approves 2017-18 school district budget, faces future budget deficits
District reserves will cover current budget but state-mandated PERS/STRS contribution increases and a $621 million other post-employment benefits (OPEB) unfunded liability will require district to reduce spending in future years
SACRAMENTO, CA – On Wednesday night, the Sacramento City Unified Board of Education unanimously approved a $566.99 million budget at a special meeting of the board. While current revenues are sufficient to cover spending for the 2017-18 fiscal year, budget staff warned that spending in future years will need to be reduced in order to avoid fiscal trouble.
“The district is able to cover its expenditures right now because we have reserves,” said Gloria Chung, Director of Budget Services for the Sacramento City Unified School District. “However, the money goes quick. If we do not cut spending for future years, then the fund balance will be gone. We must begin reducing spending in 2018-19 in order to balance our budget.”
A state-mandated increase in the amount school districts have to pay for PERS and STRS contributions is one of the many additional rising costs facing school districts across California. Rising health care costs and other expenditures are also eating up school district funds.
Although Governor Jerry Brown signed a budget earlier this week with more money going to schools, the increased PERS/STRS costs, as well as the rising health care costs and other expenditures, results in less net funding for many school districts. Brown has warned that the next recession is around the corner and districts need to prepare for a slowdown. Districts with significant reductions in their budgets include Oakland Unified, Santa Rosa, Los Angeles Unified, San Diego Unified and Santa Ana.
“While we appreciate the extra money for education allocated by the state, what they gave us on Tuesday they spend for us in debt obligations the very next day,” said Jay Hansen, President of the School Board. “This budget has taken into consideration our rising PERS/STRS costs and we have a plan to pay those down. By continuing to be fiscally responsible, we keep our district strong for students and the community.”
Click here to view the full budget presentation.