Budget Notebook: New governor asks for tax extensions to ward off more cuts


California may have new faces in the governor’s office and the Legislature, but the revenue problems that have long plagued the Golden State look all too familiar.

For his part, newly elected Gov. Jerry Brown is proposing to combat the state’s budget crisis by making additional cuts and extending taxes that would otherwise expire. But the latter will require voter approval, and there’s no guarantee that will happen. In fact, there’s no guarantee the measure will even make it to the June ballot, as that requires a two-thirds vote of the Legislature.

So, once again, the Irvine Unified School District and its counterparts throughout California are left in a fiscal fog, waiting for Sacramento to establish a budgetary framework as we contemplate two scenarios: Plan A, in which the tax extensions are approved, generating much needed revenue; and Plan B, in which the extensions don’t make it to the ballot – or are rejected by voters.

Closer to home, our Board of Education and staff have done a remarkable job of planning prudently and proactively, enabling IUSD to certify its First Interim financial report with the ideal “positive” certification. That means if current assumptions hold, we will not need to take additional steps to produce a balanced budget for 2011-12. However, IUSD continues to project a shortfall for 2012-13 that must ultimately be resolved, and experts warn that school funding will further erode if the governor does not get his tax extensions.

So what exactly would the latter scenario, or Plan B, look like for Irvine? It’s difficult to say – and in fact no one is saying at the state level. There seems to be some debate in Sacramento over whether to publicize the cuts that would be needed to balance California’s budget if the tax extensions don’t materialize. While some lawmakers feel voters won’t be able to make an informed decision without knowing how much more could be cut from schools, Gov. Brown is opting to keep many of these details close to the vest, believing voters might cynically perceive his “Plan B” as a scare tactic.

At least one thing is certain about Plan B: Proposition 98, which guarantees funding for public education, would most certainly take another hit, possibly by as much as $600 to $1,000 per student. And that would be unwelcome news in IUSD, which has been forced to make $38 million worth of one-time and ongoing reductions in recent years.

ACLU sues the State of California

I would be remiss in not mentioning another significant development that could impact our budget. As you may have read, the American Civil Liberties Union recently sued the state of California over fees charged to public school students for a wide array of materials and supplies, including workbooks, lab provisions, P.E. clothes and athletic equipment. This lawsuit has now been settled, and while many of the details will be revealed in subsequent legislation, it is clear that schools will no longer be able to charge for many materials and supplies.

This will present significant funding challenges for programs throughout California, including those in Irvine. At the same time, we are pleased to have clarity on this complex issue. Our district was already in the process of analyzing its own practices related to student fees before the ACLU filed its lawsuit. While our mission is to provide the highest level of instruction and enrichment given limited resources from the state, we agree that some fees are not consistent with the tenets of a free public education, and it has always been our practice not to exclude students from participating in activities when their families choose not to contribute.

Instead of using fees to help pay for the programs and services desired by our community, our sites will now seek donations. This will almost certainly impact on our financial bottom line – and therefore our programs – but only time will tell to what extent. Either way, we believe it’s the right thing to do. And, as affirmed by the ACLU case, it’s the law.

IUSD begins budgeting for 2011-12

Ever vigilant of the seismic shifts that can rock our financial landscape, IUSD has already embarked on the long path toward producing a budget for the next fiscal year, which begins July 1, 2011. (Our budget is due a day earlier, on June 30, though deadlines mandate that many of the big decisions be made earlier.) Meanwhile, our Board of Education has wisely directed members of the district’s Finance Committee, which has traditionally offered oversight and advice, to explore potential new sources of revenue to help our schools offset some of the recent state cuts. And the Irvine Public Schools Foundation is continuing its important work to generate funds for our schools through its annual campaign. Remember that the City of Irvine is matching contributions to IPSF – dollar for dollar, up to nearly $900,000 – as a result of last year’s local Measure R initiative.

Again, I can’t say enough to tout the financial stewardship of our Board of Education, the sacrifices of our staff, the generosity of our community and this district’s longstanding efforts to maximize resources. All of these factors have buoyed IUSD during extraordinarily challenging times, positioning us favorably relative to other school systems throughout the state.

While we continue to operate in a hazy fiscal environment, our collective commitment to education in Irvine – and to the next generation of leaders – has never been more clear.

Upcoming IPSF fundraiser will help diners take a bite out of the budget crunch

Like dining out? And helping Irvine schools? Have we got an event for you.

Dozens of local restaurants will once again donate a percentage of their profits to raise money for IUSD schools during the Irvine Public Schools Foundation’s second annual “iDine for Irvine” fundraiser, set to take place Feb. 15 through Feb. 19.

Last year, the event was limited to a single day, yet it still generated more than $7,000. That total will almost certainly be surpassed this time around. And, as a result of the passage of local Measure R in November, the City of Irvine will contribute one dollar for every dollar raised, effectively doubling the proceeds. 

For a list of the eateries participating this year, click here. (And be sure to check back with us again, as new restaurants are still signing up.)

Sue Kuwabara elected to serve one-year term as president of the IUSD Board of Education

During its annual organizational meeting on Tuesday night, the IUSD Board of Education voted unanimously to elect Sue Kuwabara to a one-year term as president and Michael Parham to a one-year term as clerk.

Sharon Wallin, who was president this past year, was honored for her service.

First elected in 2000, Kuwabara is serving her third term on the school board after running unopposed in the 2008 election. She is also the California School Boards Association’s representative to the CIF Southern Section Executive Board and has served for eight years on CSBA’s Delegate Assembly, which is that organization’s primary policy-making body.

In addition to electing officers, the IUSD Board of Education on Tuesday night approved school site liaison assignments, appointed representatives to various committees and established meeting dates through December 2011. (The next two regular meetings are scheduled for Jan. 18 and Feb. 1.)

Board members also voted to certify IUSD’s First Interim Report of 2010-11 as “positive,” meaning the district is projected to meet all of its financial obligations as mandated by the county.

(Update: To access a PDF recap of the board meeting, click here.)

Board of Education to elect a new president during final meeting of the calendar year

The IUSD Board of Education will convene for its final meeting of 2010 tonight at 7 at the District Office.

As this is the board’s annual organizational meeting, trustees will elect a new president and clerk and set meeting dates for 2011. In addition, the five-member board is scheduled to appoint school liaisons and representatives to various committees.

A little later in the session, the Board will also vote to certify IUSD’s First Interim Report, indicating the district’s fiscal health as of this fall.

The Orange County Superintendent of Schools requires every district to examine and certify its financial condition as “positive,” “qualified” or “negative” in December and again in March. Positive is the ideal certification, while qualified signals that a district may not be able to meet its financial obligations for the current year and two subsequent years. A negative certification means a district will not be able to meet its financial obligations over this period.

Staff will recommend certifying IUSD’s report as positive, indicating the district will be able to present a balanced budget.

Irvine’s District Office is located at 5050 Barranca Parkway in Irvine. To access an agenda for tonight’s session, click here.

Irvine Company donates latest installment of $20 million pledge for art, music and science

The Irvine Company this week presented IUSD with the latest installment of its pledge of more than $20 million over 10 years for enriched curriculum in art, science and music.

Robin Leftwich, vice president of Community Affairs for the Irvine Company, personally delivered a check for $2.3 million to the district at Tuesday night’s Board of Education meeting. That pushed the company’s cumulative contribution for the program past $10 million, and Leftwich noted that there are still five more checks to come.

“There’s still another $10-plus million to go, and I’ll keep coming back every year,” she said.

Launched in 2006, the Irvine Company’s Excellence in Education Enrichment Fund generously pays for art, music and science specialists in IUSD’s fourth-, fifth- and sixth-grade classrooms. (To get a glimpse at how these educators benefit Irvine students, click here and find the story on page 4.)

As we mentioned earlier in the week, board members on Tuesday also voted to ratify updated contract agreements with IUSD’s employee associations that rescinded four of eight furlough days for the current school year, including two instructional days for students.

To check out a recap of Tuesday night’s Board of Education meeting, click here.

Based on unanticipated revenue, IUSD restores four furlough days, including two student days

The IUSD Board of Education has voted to ratify updated contract agreements with the district’s employee associations, rescinding four of eight furlough days for the 2010-11 school year.

The decision was made Tuesday night based on the influx of unanticipated federal dollars, as well as recent financial projections that show positive ending balances for IUSD through 2011-12. The following morning, Superintendent Gwen Gross announced in an email to the community that two instructional days would be added back to the calendar, as would two non-student work days.

Students on the traditional September-through-June calendar will now report back from winter recess a day earlier on Tuesday, Jan. 4, and high school students will attend on Friday, Jan. 28, which had been a semester break. Students in grades K-8 will report to class on Friday, May 27, which had been a K-8 holiday.

For those on the year-round calendar, Wednesday, Jan. 5, will mark the first day back from winter recess. In addition, year-rounders will also attend on Friday, May 27.

“While we understand that altering the calendar this deep into the academic year may be inconvenient for some of our families,” Dr. Gross said, “we also firmly believe it’s the right thing to do for our students and our employees, who have made great sacrifices to prevent further job losses and program cuts.”

Teachers and staff will report for two additional work days at the end of the year, but June 15 remains the final school day for all IUSD students.

Here’s the full text of Dr. Gross’ email:

Dear IUSD community member:

Last spring, the Irvine Unified School District and its employee associations reluctantly agreed to approve eight furlough days for the current year in response to the state budget crisis. We took this significant step knowing full well that it would result in both lost instructional time for our students and lost income for our employees. Yet we also included an important caveat: If unanticipated funds became available, this district and its bargaining associations would return to the table.

I am pleased to report that’s exactly what has happened. Not only did our district plan prudently and conservatively, thereby generating projected positive balances for the current year, we have also benefited from about $5 million worth of onetime federal dollars designed to preserve jobs and maintain salaries. As a result, our district and our collective bargaining associations recently met and agreed to restore four furlough days – including two instructional days – for the current year.

With the agreements officially ratified Tuesday night by our Board of Education, the following calendar changes have been made:


Jan. 4:  Students and staff will report back to school on this date following the winter recess.
Jan. 28:  All students and staff will attend school on this date, which had been a high school semester break.
May 27:  All students and staff will attend school on this date, which was previously a holiday for grades K-8.
June 16:  This day represents a staff development day. (June 15 remains the last day for students.)
June 17:  This day will be a non-student teacher work day. (June 15 remains the last day for students.)


Jan. 5:  Year-round students and staff will report back to school on this date following the winter recess.
May 27:  All students and staff will attend school on this date, which was previously a holiday for grades K-8.
June 16:  This day represents a staff development day. (June 15 remains the last day for students.)
June 17:  This day will be a non-student teacher work day. (June 15 remains the last day for students.)

Since California’s budget crisis began, school districts across the state have been forced to react to devastating cuts and game-changing policy decisions. Yet IUSD has done its best to plan responsibly and proactively, and that has put us in a favorable position relative to many of our neighboring school systems. While we understand that altering the calendar this deep into the academic year may be inconvenient for some of our families, we also firmly believe it’s the right thing to do for our students and our employees, who have made great sacrifices to prevent further job losses and program cuts.

I must remind you that significant challenges remain. The state’s budget, adopted only last month, represents a sloppy patchwork of faulty revenue assumptions, and experts tell us that California’s anticipated shortfall for the next 18 months is already a staggering $25 billion. Districts are advised to exercise caution as midyear cuts at the state level are a very likely scenario. Even more sobering, some are projecting that the state’s shortfall will last through 2015-16. 

Our district, as it has done in the past, will continue to closely monitor these fiscal trends to ensure we’re in the best possible position moving forward. In the meantime, I thank you for your patience and support of our 27,000 students. 


Gwen E. Gross, Ph.D.
Superintendent of Schools
Irvine Unified School District

Budget Notebook: Making the most of available resources, IUSD projects positive balances


This week, bands of heavy rain swept over the Irvine Unified School District, and thunder boomed intermittently. Yet rigorous instruction persevered in the dry confines of our classrooms.

Similarly, our district continues to weather the fiscal storm brought on by California’s budget crisis. And while we have certainly felt the tempestuous impacts, we are now in a position to cautiously project positive ending balances for the next two years.

For this we must credit the careful financial stewardship of our Board of Education, the sacrifices of our incredible staff, the generosity of our community and our district’s longstanding efforts to maximize every dollar and to put resources toward results.

Challenges remain, of course, but consider for a moment this fact: IUSD will not have to make additional reductions to declare a “positive” certification on its First Interim Report, which indicates financial health. Not many districts in the state of California can make this claim.

At Tuesday night’s Board of Education meeting, Assistant Superintendent Lisa Howell broke down the state’s latest budget and its impact on the Irvine Unified School District.

There was some good news in that the state spending plan adopted on Oct. 8 reversed a 3.86 percent cut and a negative cost-of-living adjustment for school districts. And there was bad news, including the governor’s surprising decision to veto critical funding for child care and special education programs.

But what’s most alarming is that the state budget for 2010-11 is built on a fairy tale of revenue assumptions, which will almost certainly turn back into pumpkins after the November election. Indeed, experts are saying that the Legislature’s revenue projections are already lagging, and that means mid-year cuts at the state level are very likely.

Because of this, the Irvine Unified School District’s financial picture is subject to change. But even based on worst-case scenarios, we are still projecting positive ending balances in 2010-11 and 2011-12. Here are just a few reasons why we’re in this unique position:

     • Our Board of Education quickly tapped the brake pedal on expenditures as California’s budget crisis began, enacting budget freezes and reductions that freed up onetime dollars to cushion the impacts.

     • Our staff made tremendous sacrifices, agreeing to four furlough days in 2009-10 and eight this year. This move alone saved IUSD approximately $8.5 million, negating the need for even deeper program reductions.

     • Our Business Services team budgeted proactively and conservatively while closely monitoring developments out of Sacramento.

     • Our administration costs remain extremely low. In fact, since 2003-04, the percentage of central administration expenditures has dropped from 5.25 percent to 3.65 percent. That places our district well below the countywide average.

     • Groups including the Irvine Public Schools Foundation and the City of Irvine stepped in to help fill critical gaps.

     • Our district embarked on an ambitious campaign to conserve energy costs, netting hundreds of thousands of dollars in savings. In addition, IUSD is moving to establish energy-generating solar panels at nearly 20 sites – a move that will conservatively save $8 million over two decades – at no cost to the district.

We know from the headlines that California’s recovery from the Great Recession has been slow, as has the nation’s. Yet Irvine homes are maintaining their values, and the city’s median household income remains stable. This can be attributed in large part to the quality of our schools, which collectively posted a 916 this year on the Academic Performance Index, moving IUSD into a first-place tie for large school districts.

I’ve said it before, and it bears repeating here: Our financial challenges have been great, but the resolve of our community is far greater. Every day, the Irvine Unified School District and its fiscally prudent Board of Education are committed to making the most of our existing resources, investing in programs and services that yield maximum returns for our students. The results speak for themselves.

Board of Education votes to reopen negotiations with employee associations for 2010-11

Based on the projection of positive ending balances through 2011-12, as well as the arrival of approximately $4.5 million in federal dollars, the IUSD Board of Education on Oct. 5 voted to reopen negotiations for the current year with the Irvine Teachers Association and the local chapter of the California School Employees Association.

Back in March, with IUSD facing a shortfall of $20 million, Board members approved a number of staff-recommended reductions that included four districtwide furlough days for 2009-10 and eight for 2010-11. As furloughs represent a loss of compensation for employees, the days were secured through the collective bargaining process – and with the understanding that the district would reopen negotiations if new funding materialized in 2010-11.

Assistant Superintendent Terry Walker said negotiations will address IUSD’s current projections and the new federal dollars, as well as the uncertainties associated with the state budget.

To read a recap of the Oct. 5 Board of Education meeting, click here.

State lawmakers come to terms on a budget for California – 100 days after it was due

Well, better late than never.

California’s budget arrived 100 days late to be exact, setting a new mark for the longest budgetary impasse in state history. But by Oct. 8, lawmakers had approved a spending plan for the fiscal year that began in July. (The Los Angeles Times has more here.)

IUSD’s Business Services staff will closely scrutinize details of the plan in the days ahead. Yet initial reports indicate that the budget is at least a little more favorable to education than what was outlined in the governor’s proposal from May. That said, Gov. Schwarzenegger personally vetoed nearly $1 billion in welfare, child care and special education programs that will impact school districts, and most experts agree that California’s spending plan is based on some pretty rosy revenue assumptions that probably won’t hold up. That means mid-year cuts at the state level are a possibility.

You’ll recall that Irvine Unified adopted its budget for 2010-11 in June, which is when school districts are legally required to do so. (The state shares this deadline, but Sacramento is usually tardy.) In order to present a balanced budget, IUSD first had to approve a raft of budget reductions and adjustments to bridge a deficit estimated at about $20 million.

With costs coming in slightly lower than anticipated and revenue coming in higher, the district is now cautiously projecting positive ending balances through 2011-12. To read a recent update on IUSD’s finances from Superintendent Gwen Gross, click here.

Gov. Schwarzenegger and lawmakers say they’ve struck a deal on a state budget

Potentially ending the longest budget impasse in California’s history, it was announced on Oct. 1  that Gov. Arnold Schwarzenegger and key legislative leaders had finally reached agreement on a spending plan for the current fiscal year.

Few details have been released, and lawmakers still must vote on the plan, which would presumably close the state’s $19 billion shortfall. Then there’s the possibility that the budget’s passage could be complicated by the upcoming election, as noted in a recent Los Angeles Times article.

The Irvine Unified School District is closely monitoring developments out of Sacramento, as a number of variables in the state budget will have local impacts. In the meantime, the district is cautiously projecting positive ending balances through 2011-12.

For the latest on IUSD’s budget, click here.