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Milpitas
Wednesday, July 8, 2020
Coronavirus School District predicts balanced budget despite COVID-19 fears

School District predicts balanced budget despite COVID-19 fears

The COVID-19 pandemic has upended the Milpitas Unified School District’s (MUSD) plans for several months now. But even as teachers and students gear up for a second academic year of distance learning, the district foresees a balanced budget for the upcoming year, according to a press release from MUSD.

The balanced budget will come at a cost, though. Due to unexpected COVID-19 costs and a proposed 10-percent statewide education budget cut by Governor Gavin Newsom if Congress doesn’t send the state at least $14 billion in federal aid by July, MUSD will shift $15 million in reserve funds to keep the books in check.

“When Governor Newsom proposed the reductions to education, he did not release much detail on how to implement the cuts of the subsequent years following 2020-21,” said Wendy Zhang, assistant superintendent of MUSD. “With this large-scale reduction to education, it leaves us with no choice but to tap our reserves to have a balanced budget.”

MUSD’s 2020-21 budget estimates $127.7 million in expenditures and $125.8 million in revenue. The district will receive $7 million less in Local Control Funding Formula (LCFF) funds from the state as compared to the current school year. LCFF funds make up 70 percent of the district’s revenue, according to the press release.

Newsom and the California Legislature have been wrestling with the governor’s proposed budget this month as the state faces a $13.4 billion shortfall this fiscal year and a $40.9 billion deficit next fiscal year. Less revenue coming into the state will mean less funding for schools, with an estimated $18 billion drop, according to the state’s education funding formula.

In Milpitas, the district’s Student Nutrition Department went from having close to $280,000 in reserves to operating at a $302,000 deficit. Meanwhile, instructors for the district’s Adult Education Program at the Elmwood Correctional Facility have been prohibited from stepping inside the facility due to the state’s shelter-in-place orders. That has led to a $245,000 deficit for the program.

The details of MUSD’s proposed budget were discussed at a June 9 budget study session, where cost projections for staffing, special education, student nutrition, adult education, the Child Development Center, and payroll were discussed, among other items.

“Since the pandemic has created a new reality, we will have to come up with a comprehensive adjustment to our operation and allocate our budget accordingly,” said School Board President Hon Lien. “We definitely need all hands on deck.”

You can access the district’s entire proposed budget here.

Evelyn Chua for City Council 2020 FPPC #1425324

Lloyd Alaban
Lloyd Alaban
Lloyd Alaban is a reporter who has lived in Milpitas his entire life. He has a BA in Sociology from UC Santa Cruz and a MS in Journalism & Mass Communications from San Jose State University. He has written for publications such as AsianWeek, realtor.com, Work+Money, SpareFoot, Uni Watch and San Jose Inside. He’s also worked at tech companies like Yahoo! and Google, and has subbed at every public school in Milpitas — except Pomeroy. In his spare time, he likes playing anything that has to do with trivia (especially watching Jeopardy!), running, drinking beer, reading, and playing with his Siberian Husky.

1 COMMENT

  1. Because the district has been conservative in its planning, especially with reserves, they are able to withstand the initial blow of the state’s reduced funding and have a balanced budget for the upcoming school year with certain assumptions for the cost of COVID-19. However, it is important to realize that there is NOT a very good understanding of how long the COVID-19 safety measures will required or its actual cost, and therefore, it can be a lot more expensive than estimated. (Hopefully not, as there has been a suggestion that the state may be able to provide help with COVID-19 related costs such as disinfectants, masks, thermometers, etc.). And the district is completely depleting its reserves by 2021-22, to balance the next year’s budget. School budgets are planned out 3 years in a row, and in the presentation of the scenario that was adopted, the district will be in the red $2M next school year (2021-22) and $21.5M in the following year (2022-23). This is why I encourage our state DO NOT cut funding to the LCFF and also help with additional funding to cover the cost of the safety measures needed to ensure that our classrooms are safe for all. Otherwise, there will be a need to raise more funds (e.g. taxes) or cut programs and staff in order to balance the budget.

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