The Davis school board approved a 2011-12 budget on Thursday night, even as Gov. Jerry Brown was signing what are known as “trailer bills” in Sacramento — some of which could have what the Davis trustees feared will be a negative impact on local school districts.

“The (state budget) that came out this week doesn’t challenge our (Davis school district) budget assumptions right now,” Associate Superintendent Bruce Colby told the Board of Education at its meeting Thursday.

“But the big thing about the state budget is that the crisis continues. This year’s state budget is funded by deferrals (of payments to local school districts) and revenues they hope they’re going to have (by December). It’s not stable.

“We have to watch our school district budget very carefully.”

Davis still has a structural deficit, part of which is covered by Measure A, a two-year parcel tax approved by local voters in May. But state funding for special education and mental health programs may not be forthcoming, even though these programs are mandated.

While the Davis school district has thus far been able to maintain a “positive” budget rating from the Yolo County Office of Education as state funding has ebbed, there are plenty of budgetary storm clouds on the horizon.

“We still have a budget crisis that we need to work through, every year for the next three to five years,” Colby advised.

Woodland’s school district hasn’t been as fortunate; it has slipped down to “qualified” status, along with most school districts in Sacramento County, as rated by the Sacramento County Office of Education.

Colby added that while Davis will receive, at best, “flat funding” under the new state budget, he warned that “this could drop substantially” if state revenues fail to reach what many observers regard as optimistic revenue projections during the next six months. If that happens, several triggers would kick in, which would mean further midyear reductions in state funding to local school districts.

“If the state pays us 66 cents on the dollar for student attendance, and the other 34 cents (on the dollar) are deferred to next year … it puts an incredible strain on (our school district) as we manage our cash flow,” Colby warned. “We’re still looking at possible reductions coming down” in state funding, he said. “The district’s remaining financial reserves could disappear very, very quickly.”

Colby also noted that two current local school parcel taxes — Measures Q and W, which generate about $6.5 million annually to support classroom programs — will expire on June 30, 2012. School leaders are expected to ask voters to renew some form of these taxes in an election next spring.

Measure A, approved in May to provide emergency funds for two years, will expire on June 30, 2013.

Trustees also lamented Gov. Brown’s decision Thursday night to sign AB 114, a budget trailer bill that, among other provisions, diminishes the authority of county offices of education to review local school district budgets. Until now, the local offices were required to review each local school district’s budget three years into the future to see if the budget balanced. Under AB 114, the offices will look only at the coming year, meaning there will be less oversight of emerging budget problems.

Davis school board trustee Susan Lovenburg said she is “appalled” that “a governor who preaches fiscal responsibility” would have signed a bill like AB 114. “I’m really angry,” she added.

Trustee Gina Daleiden quipped that Davis trustees “should probably all have our blood pressure checked occasionally,” because of the frequent, unpredictable reductions and deferrals in the state budget for K-12 education.

Board President Richard Harris noted the new state budget will allow school districts to reduce the academic year by seven days if state revenues fall short of the $4 billion increase (hoped for by mid-December) that is anticipated in the budget assumptions.

“The state Legislature is making some very rosy assumptions. … It puts us in a tough, uncomfortable position (at the local level),” Harris said.

A 180-day school year was common in California a few years ago; it’s already shorter than the 200- to 220-day school year in many Asian and European countries. With a five-day reduction already adopted by many California school districts last year, and the additional seven-day reduction that could be authorized this year, many California students could be in the classroom only 168 days in the future, a full two months less than many of their counterparts around the world.

“What are our options?” Harris asked Colby. “I know this is uncharted territory.”

“I believe (the district) has banked enough fund balance to get us through this year,” Colby replied. “We purposely banked the federal jobs bill money (received last year). But we will be sitting here in the spring, wondering if we might run out of money in 2012-13.”

Harris said, “That rainy day we were preparing for (last year) … the storm is right there, and coming at us.”

— Reach Jeff Hudson at [email protected] or (530) 747-8055.

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