Stanislaus County school districts could lose an estimated $21 million in state funding for attendance next school year, compounding their struggle to balance their budgets.
Two districts — Salida Union and Stanislaus Union in north Modesto — might not be able to pay their bills because of that projected loss and other challenges in the next two school years, according to a report from the Stanislaus County Office of Education.
Salida and Stanislaus Union are under extra scrutiny from the county office, which monitors school spending, because of the risks their budgets present. The county certified their budgets as "qualified," reflecting that negative outlook.
And 23 of the county's 25 districts will receive extra monitoring because they have low reserve levels or other red flags, such as deficit spending.
Only Gratton and Paradise school districts are considered to be in good shape for now.
The report is another reminder of the difficult choices Stanislaus County school districts face as they write budgets this spring. Several likely will have to slash spending by 10 percent or more, jeopardizing classroom jobs and extracurricular activities ranging from arts to sports.
Salida Union worsened its problems this fall with a miscalculation in how it projected state funding. It now faces a 10 percent cut from its $24 million budget, according to a presentation at the school board this week.
Stanislaus Union is projected to run out of its savings in the 2011-12 school year. Its overspending also landed the district on the "qualified" list. This is despite closing Muncy School last year to cut costs.
"They've done the tough stuff, made some of the tough decisions, but I think there's more to come, for many districts," said Don Gatti, assistant superintendent of business at the Stanislaus County Office of Education.
Stanislaus Union Superintendent Wayne Brown welcomed the additional oversight from the county Office of Education, calling it "another resource for us." Brown said officials have been developing plans for more reductions, but he wasn't sure how much they'd total out of the district's $26 million budget.
The dire news came as districts submitted their first interim budget reports to Gatti's office. The documents detail spending and revenue through Oct. 31.
"We review the districts' financial condition and then note what action the districts are taking to nullify the problems," said Gatti, who forwards the list of "qualified" first interim reports to the state Department of Education.
The county Office of Education can choose to assign a fiscal expert to those districts, which it did at Salida Union, Gatti said.
List likely to grow
When districts do a second interim report — which covers finances through Jan. 31 — Gatti predicted that more districts will appear on the "qualified" list.
"I'm fearful it'll be even worse," as the state continues to cope with the recession and revenue shortfalls, he said.