Despite state crisis, Palo Alto school budget has surplus | July 22, 2011 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - July 22, 2011

Despite state crisis, Palo Alto school budget has surplus

District avoids cuts to programs and staff

by Chris Kenrick

As school districts across California confront dire budget scenarios, the Palo Alto school district has nearly $29 million in designated and undesignated surplus funds, a small portion of which will be used to avoid serious cuts in 2011-12.

Students will return to campuses next month with full complements of staff and programs, as well as funds allocated to give teachers time for professional development.

"We feel like we're in a good position, as strong as we could be given what's going on in California," Superintendent Kevin Skelly said.

"Our challenge in the next year as in past years is looking at the uncertainty and building a revenue balance to be prepared for whatever possibilities are happening."

The Board of Education approved the district's $162.4 million operating budget for 2011-12 on June 28. In addition to the revenues projected in the budget, the district also has nearly $16 million in restricted, reserved and designated fund categories and $13 million in unrestricted and undesignated categories going in to this school year.

By contrast, the neighboring Ravenswood City School District, serving East Palo Alto and eastern Menlo Park, will close campuses, boost class sizes and shorten the 2011-12 school year to make ends meet.

Funded mostly through local property tax, Palo Alto schools are largely buffered from the exigencies of 90 percent of California districts, including Ravenswood, that rely directly on Sacramento for per-pupil revenue.

However, Palo Alto's operating budget did take $7 million in so-called "fair share" state cuts, which were offset with, among other things, $1.3 million from the surplus.

Palo Alto found other savings in reducing the number of new teachers that will be hired, a slightly smaller allocation to routine maintenance and a projected increase in property taxes.

Given the uncertain state outlook, the Palo Alto school board for the past year has requested frequent budget updates from staff, for close monitoring of the situation.

Leftover funds from prior years are routinely used to plug gaps.

Under current projections, the district's Co-Chief Business Officer Cathy Mak said that the "undesignated fund balance" will be exhausted by the end of 2014-15.

The 2011-12 operating budget includes $11.6 million in revenue from the $589-per-parcel tax passed last year.

It also includes nearly $10 million in lease revenue — mostly from rent paid by the City of Palo Alto for use of the Cubberley Community Center — as well as $3.4 million in donations from Partners in Education, an independent, parent-led foundation that raises funds for Palo Alto public schools.

With a growing enrollment — officially counted at 12,024 as of last fall — Palo Alto operates two high schools, three middle schools and 12 elementary schools as well as a small school at Lucile Packard Children's Hospital.

Staff Writer Chris Kenrick can be emailed at


Posted by barbara, a resident of Barron Park
on Jul 22, 2011 at 10:48 am

This is interesting since when the district wanted the new parcel tax they made it seem like they wouldn't be able to open the doors without it. Guess we got fooled again.

Posted by Laurie Hunter, a resident of Old Palo Alto
on Jul 22, 2011 at 11:00 am

I am grateful to the PAUSD and community leadership for righting the ship. My 19 and 23 year old sons grew up here in really shabby school facilities, which was fine, but that was unsustainable. So glad we currently have a surplus, at least for 3 more years as the article mentions, a welcome relief in an era where city, county, state and federal govts are all in deficit.

Posted by anna, a resident of College Terrace
on Jul 22, 2011 at 12:29 pm

"students will return to a full complement of programs"..... really? So this fall my elementary kids will have foreign language instruction? And music education - not a random music teacher for certain grades just once in a while, but a full-time music teacher?- And a health class? And a school nurse on sight? - I can't wait!!!!

"Surplus" doesn't mean the schools are fine - it means we've dodged a bullet for now. Yes, we are much better off than surrounding districts - but look at what the public schools have in other equally affluent areas - we are still woefully behind.

Posted by Dan, a resident of Southgate
on Jul 22, 2011 at 12:33 pm

PAUSD is the crown jewel of Palo Alto. If our schools were the worst in the State, or even average, rather than the best, Palo Alto wouldn't be nearly as attractive a place to live. Home prices would drop, taking City revenues with them. The schools would deteriorate further, and the cycle would continue. It's happening all over this State. We must never take our schools for granted.

Posted by Resident, a resident of Another Palo Alto neighborhood
on Jul 22, 2011 at 12:48 pm

This is news we should be wary of. I sincerely trust that PAUSD will not use this surplus in any type of frivolous manner and keep it in a rainy day fund for the future when we need it to upgrade Cubberley, or Greendell, or wherever, so that parcel taxes and bonds will not be taken out yet again to provide for the overenrollment and future housing producing children in our schools.

Posted by Anna is right, a resident of Greenmeadow
on Jul 22, 2011 at 2:23 pm

This news reflects good budget management on the part of PAUSD, but Anna, above, is absolutely right--compared to some other areas of the country that are high-achieving, PAUSD spends less and offers less. Given the possible state budget outcomes (including devastating mid-year cuts for this very year), we're fortunate to maintain some surpluses but we're not out of the woods yet. So long as the state of California refuses to provide adequate funding for the cornerstones of a viable society--education and infrastructure--at best, Palo Alto and PAUSD are clinging to a reasonable--not elaborate or luxurious--approach through local fundraising. I'm so grateful that Palo Alto citizens have agreed to pay for school and library construction and hope that we continue to band together to support our crucial civic institutions.

Posted by Marie, a resident of Gunn High School
on Jul 23, 2011 at 3:37 pm

Give the teachers a raise and eliminate the employee contributions to benefits. This item was given away by the union based on lies and faulty intel. Teachers have been played for fools - once again! Show them the money and some RESPECT.

Posted by Sylvia, a resident of Midtown
on Jul 23, 2011 at 4:55 pm

I agree with Dan. I have no children, nor have I ever had any, in the PAUSD. But good education benefits everyone, in my opinion. I've always voted for school bonds, even though I bought my house here after my son finished school in another district. It's become a bit of a cliché, but we do need to think globally and act locally. Having children receive a good education in my local school district makes me happy. As a side benefit, these schools are good for the value of my property.

Posted by Carlito Waysman, a resident of Old Palo Alto
on Jul 23, 2011 at 6:59 pm

That means that a new Parcel Tax is in the works, folks. I would not have any problem with it , if the ones allowed to vote on it were Palo Alto property owners.

Posted by student, a resident of Gunn High School
on Jul 24, 2011 at 1:11 am

That's funny because I was wondering why Gunn was giving every student a free T-Shirt for no reason when my Japanese class has hit 45 students in one classroom.

Posted by Muffy, a resident of Crescent Park
on Jul 30, 2011 at 9:19 am

Darlings, anyone who's anyone sends their children to private school. Must we hear about these tedious budget and tax woes that only matter to the type of people who hold jobs because they need to? Boring.

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