Spending

MPCSD Budget Stable, but District Remains Cautious on Spending | New

Ukraine’s ongoing war and rising costs to mitigate learning losses during the COVID-19 pandemic have strained school districts, including the Menlo Park City School District (MPCSD), according to the budget. of the district’s 2022-23 fiscal year.

The budget, passed in June, projects the district will generate about $65.1 million in revenue in the fiscal year beginning July 1 and expects to spend about $64.3 million.

Following the passage of Measure B’s Package Tax in November 2021, along with approximately $2 million in budget cuts over the years 2021-22 and 2022-23, the District is “now in a better financial position that is sustainable barring any other global pandemic or catastrophic events like the war between Russia and Ukraine,” according to the budget. The document notes that these events have driven up gasoline prices and food from these countries.

The parcel tax is expected to generate approximately $10.9 million in fiscal year 2022-23. It grossed around $9.1 million in the previous fiscal year.

The school board has a policy of keeping at least 15% of total annual expenditures in reserves. Reserves remain at just under 18%.

The district has committed to paying teachers more in 2019 with its Teacher Compensation Philosophy. Salaries and benefits represent approximately 90% of operating expenses.

The district will continue to monitor future enrollment growth as people move into developments around El Camino Real.

The budget assumes about 2,730 students in the next school year, a slight increase from the 2021-22 school year when there were about 2,716 students enrolled. Since enrollment is currently stable in the district, there will not be a significant increase in membership, according to the district.

Other Bay Area districts, including neighboring districts, are seeing declining enrollment.

As a community-funded (or grassroots aid) school district, funding is largely unrelated to enrollment growth. More students will need additional staff, which will cost more but without a commensurate increase in income.

Community-funded districts are not included in the governor’s budget funding for Transitional Kindergarten (TK), which districts are required to offer beginning in the 2022-23 school year.

The district plans to enroll approximately 38 TK students in the next school year.

The State Teachers Retirement System (STRS) for graduate staff and the Public Employees Retirement System (PERS) for non-graduate staff strain the budget.

The employers’ contribution for teachers had previously remained stable at 8.25% of certified salaries. The employer’s contribution was increased from 8.25% to 19.1% over a seven-year period, increased under new state requirements beginning in fiscal year 2014-15.

During the pandemic, the governor relieved schools by reducing unfunded liabilities. In June, Governor Gavin Newsom offered relief in the form of a $3.6 billion flexible block grant that can be used for operational costs, including pension payments.

CalPERS employer rates are expected to drop from the current rate of 25.3% in 2022-23 to 25.2% in 2023-24 and 24.6% in 2024-25.

Due to high inflation (5% in April), the district continues to monitor changes as they affect the budget for books, materials, supplies, and other services.

In addition to high inflation, Governor Newsom noted that capital gains income (including earnings from stock market investments) is at historic highs (approximately 9.7% of total general fund income in 2021- 22) and are likely to return to norms closer to 5.5% in the future.

“With the current volatility and declines in the stock market, some loss of capital gains income seems likely in the near future and could complicate the task of balancing budgets,” according to the district budget document. “As the district assesses its long-term goals, it requires collaboration, creative thinking, and additional funds that are not part of current budget planning, such as funding for traditional knowledge. The revenue forecasting model is based on a constant and continuous growth of the property tax based on the latest trend and the world economy.”