When the Turlock Unified School District Board of Trustees adopted its 2020-21 Budget in June, they anticipated an $11 million shortfall in revenue due to the coronavirus pandemic. For the first time in several years, however, a revised budget was adopted during last week’s meeting which takes into account significant changes made at the state level.
TUSD has not prepared a 45-day Revised Budget for quite some time, Assistant Superintendent of Finance and Accountability Marjorie Bettencourt explained, but 2020 is a unique year due to the ever-changing nature of the coronavirus pandemic. The original adopted budget was based on factors in the Governor’s May Revise, but some major changes were made to the State Budget between May and its official adoption — including a reversal on an initial 10 percent cut to the Local Control Funding Formula.
LCFF funding makes up approximately 82 percent of TUSD’s total budget, and it was originally expected that the cuts included in the May Revise would eliminate $10.8 million in funds for Turlock students. Even with every TUSD cutting 10 percent of their budget for books, supplies and other services, the District’s reserves sat at about 5.9 percent — much lower than the 17 percent recommended by the Government Finance Officers Association.
With TUSD’s 45-Day Revised Budget, the $10.8 million is back in the budget and its expenditures have not changed, meaning the District’s reserves will be at 12 percent with an ending balance of $21,147,418. The budget’s ending balance prior to the 45-day Revision was $10,343,101.
“When we adopted the budget, we were assuming that there was going to be this reduction in funding,” Bettencourt said. “When the state adopted their budget, there was no reduction in funding.”
Moving forward, multi-year projections predict a 9.59 percent reserve in 2021-22 and 8.7 percent reserve for 2022-23. Most economic advisors have cautioned that these projections are heavy with optimism, Bettencourt added, and that Trustees should take care when making big decisions based on this optimism.
“First time in five years I’ve ever seen a 45-day revision of the budget, so that just sort of tells you, I think, a perspective on how fluid this situation is that we’re dealing with,” Trustee Ken Malech said.
The State was able to hold off on cuts to LCFF funding by balancing the budget through deferrals. Approximately 35 percent of TUSD’s 2020-21 apportionment, or $34 million, will be deferred from February through June to July through November 2021, unless additional Federal assistance is received.
“A deferral is basically; it’s paying you later. It’s like me saying you’re going to get your paycheck every month, but then I say, well, I’m going to defer my payment,” Bettencourt said. “So even though you are entitled to a paycheck for May and June, I’m going to take a portion of that and say I’m going to pay you later.”
Trustee Frank Lima pointed out that deferrals are nothing new, and the State used them in order to survive during the last recession.
“This is not out of the normal for this to happen,” he said. “It’s just inconvenient for districts — especially those without much reserve.”
Trustee Mary Jackson agreed that deferrals were nothing new, but pointed out their long-lasting implications. She noted that Gov. Gavin Newsom just announced in January that California had finally caught up to its deferrals from the recession.
“It took us 10 years to get there and look where we are now,” she said.
Not included in the 45-Day Revised Budget is the $14.3 million in COVID-19 relief funding to support pupil academic achievement and mitigate learning loss related to school closures. These are one-time, restricted funds with specific deadlines, and more information regarding these funds will be shared during the Sept. 1 Learning Continuity and Attendance Plan Public Hearing.