IUSD cautiously projects an increase in funding in 2013-14, though challenges remain


The Board of Education voted to certify IUSD’s Second Interim Report as “positive” on Tuesday night, meaning the district expects to meet all of its financial obligations for the current year and two subsequent years.

Before the vote, Assistant Superintendent of Business Services John Fogarty shared revenue and expenditure assumptions with board members and discussed the potential impacts of Governor Jerry Brown’s latest budget proposal.

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Fogarty said the centerpiece of Brown’s spending plan for public schools is what’s known as the “Local Control Funding Formula,” which would provide additional dollars to school districts based on their proportion of English-language learners and students who are eligible for free and reduced-price lunches. Though the concept may be well intentioned, some districts would receive less funding than they would qualify for under the traditional Revenue Limit system.

In fact, under Brown’s plan IUSD would receive $2.2 million less in 2013-14 than it would under the current Revenue Limit calculation, and that number grows to $31.5 million in 2021, when the Local Control Funding Formula is projected to be fully funded. Still, Fogarty pointed out that the new formula is merely a proposal at this point, and it could be altered significantly through the legislative process.

Given that uncertainty, school districts are being advised to budget conservatively, and IUSD filed its Second Interim report assuming a cost-of-living increase of about $89 per student in 2013-14 after years of significant reductions. Factoring in a separate increase in block grant funding for mandated programs, Irvine could receive an overall bump of $3 million to $5.7 million next year, depending on how the governor’s plan shakes out.

While that is welcome news, Fogarty cautioned that IUSD continues to operate with a structural deficit, meaning expenditures are outpacing revenues. The district has strategically relied on one-time reserve funds to preserve valuable programs and staff during the budget crisis, but those funds won’t last forever, he said.

“We’ve suffered tremendous reductions over the last four years, and we appreciate the efforts of our teachers, leaders and staff to maintain excellence in and out of the classroom,” Fogarty said this week. “Certainly challenges remain, but our hope is that the worst is behind us.”

Every school district in California is required to examine and certify its financial condition twice each fiscal year. Positive is the ideal certification, while “qualified” indicates a district may not be able to meet its financial obligations for the current year and the two subsequent years. A “negative” certification means a district will not be able to meet its financial obligations over this span.