Palo Alto school officials are battening down the hatches in anticipation of a state funding cut that could be as high as 9 percent of the district's operating budget.
With the breakdown of talks in Sacramento over a June ballot measure to extend nearly $12 billion in taxes, the Board of Education heard Tuesday that Palo Alto schools could be hit with a state reduction of up to $14.7 million.
The district's operating budget this year is $154.5 million, with some additional unrestricted funds held in reserve.
"We're in a state of tremendous flux," Superintendent Kevin Skelly said.
With Gov. Jerry Brown's failure to get the tax extension on the June ballot, "our uncertainty has diminished but our problems have increased.
"It's important for staff to present this information as soon as we have it so the community is aware of what's going on," Skelly said.
Palo Alto is more insulated from state budget swings than most school districts because it is among the roughly 10 percent known as "basic aid" districts, relying heavily on local property tax rather than attendance-based reimbursements from Sacramento.
However, basic aid districts will take what are known as "fair share" reductions which, for Palo Alto, could be a maximum of $14.7 million, Mak told the board Tuesday.
That scenario would "wipe out our unrestricted investment and fund balance," she said.
The school district went through an exhaustive budget-cutting process 18 months ago, consulting teachers, students, staff and parents before approving $3.8 million in cuts -- about 2.5 percent of the operating budget -- in February 2010.
The largest single chunk of those cuts -- $600,000 -- came from raising the maximum class size in K-3 to 22 children and, in grades 4 and 5, to 24 children. The second-largest chunk came from reducing principals' discretionary funds from $105 per student to $70 per student, a cut that was mitigated by contributions from the independent parent-run educational foundation Palo Alto Partners in Education.
Mak said she expects no further budget information until May and, in the meantime, will begin consulting various groups for budget-cutting ideas.
"It's important that we get this out there for the community for folks to mull over," Skelly told the board. "Staff will work over the next three weeks, and we'll keep you abreast."