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District CBO Offers Feedback to the Recent RAND Report

"Without Flexibility, There's No Way My District Could Have Stayed Alive Fiscally and Programmatically"

By Jeff Hudson - June 9, 2011

(Part One in a series)

In late May, the RAND Corporation released a preliminary report, “Deregulating School Aid in California - How Local Educators Allocate Flexible Tier 3 Categorical Funds: Findings from 10 School Districts in the First Implementation Year, 2009-2010.”

After examining the situation in ten school districts, the report concluded that California school districts – wielding new fiscal flexibility granted by state lawmakers – had cut deeply into several popular programs to balance local budgets, due to financial hardship brought on by the state budget crisis.

As a follow-up, EdBrief sought opinions and feedback to the RAND report from some high level administrators in California school district. This week’s conversation is with Brett McFadden, who is Associate Superintendent for Business Services and Chief Business Officer with the Pajaro Valley Unified School District (PVUSD).

The Pajaro Valley district serves a sprawling territory ranging from the affluent coastal/redwood community of Aptos (Santa Cruz County) southward to more rural Las Lomas in northern Monterey County. The district office is in Watsonville, an area that’s seen some economic setbacks, where many neighborhood elementary schools have high percentages of Latino students, many of whom are English Learners coming from comparatively low-income households. Although many in California think of Watsonville as being a “small town,” the Pajaro Valley district serves around 19,000 students spread over 34 school sites, including some charter schools.

McFadden – who joined PVUSD last year after a long stint in Sacramento as a staffer with the Association of California School Administrators – said “without the flexibility, there is no way my district could have stayed alive fiscally and programmatically during this fiscal crisis.”

As the state budget crisis kicked in around 2008-09 (“before I got here,” McFadden observed), PVUSD administrators realized they were “in for a hell of a ride,” because “any reductions we're going to make would have some kind of impacts on the instructional program.

“So we have sort of approached it like an onion. We began to peel off layers over time,” McFadden said. “We said, ‘Alright, what’s the size of the cut that we need to make in order to remain positive (in our budget certification) in our multiyear budget projections. And then we would utilize the flexibility to the extent possible.”

“I implemented fund shifts (under flexibility) to the extent I needed them fiscally, and to the extent I could achieve them politically,” McFadden said. Early on in the budget crisis, there were some programs that the PVUSD school board trustees didn’t want to cut. But over time, as the state budget crisis got worse and worse, the school board saw the necessity of making cuts to programs that they would have preferred to leave intact.

One of these programs was Adult Education. “We had a very large Adult Ed program,” McFadden said – a reflection of the demographics in the Watsonville and North Monterey County portions of the district, where there are high percentages of immigrants from Mexico, as well as significant numbers of California-born citizens who did not finish high school.

“In the first round, we took $650,000 from Adult Ed,” McFadden said. That led to a capacity crowd at a school board meeting, opposing the Adult Ed program cuts.

“Our board didn’t want to cut Adult Ed. But then I showed them that it’s either ‘Cut Adult Ed’ or ‘Close School Libraries.’ When you put it in that context, they said the kids had to come before the adults. Despite the fact that our Adult Ed was a good, vibrant program. It was a policy call.”

During a second round of budget cuts, another $1 million came out of Adult Ed. “All told, at the end of the day, $1.8 million has come out of Adult Ed,” McFadden said, “leaving Adult Ed with $1 million to operate.”

Another cut came in the form of taking advantage of the option to reduce the school year by five days, from 175 days to 170 days. This wasn’t an option McFadden liked. He actually thinks the school year should be longer. “We need to get serious about the fact that our colleagues in other countries spend a lot more time educating their kids, with a longer school day and a longer school year. It is the reform that has been proven to work. If you match standards-aligned curriculum, good instruction, accountability and the combination of a longer school day and a longer school year, you’re going to see good education results. That’s the reason why Japan, Korea, Norway, and other countries surpass us – they’ve got kids going to school 220 days a year.”

Reducing the 175 day school year to 170 days was the change “that caused me the most angst,” McFadden said, “though I did it. You have to stay alive fiscally. But given the students that my district serves, their background, and their language status, taking five days of school away from them was not the best policy move we could make. I did it, I recognize why I did it, but I don’t like it.”

McFadden said he’s well aware that cuts to programs like Adult Ed and a shorter school year are not popular. “So I have an ongoing communication plan,” he said, including regular appearances at Chamber of Commerce meetings, Rotary Club meetings, and similar groups, at which McFadden provides a broad-angle overview of the district’s financial plight. On occasion, McFadden said, he’s taken along a copy of the budget and invited people at these meetings to help him identify more appropriate places where budget cuts could be made.

Of course, the state budget crisis isn’t over. “The flexibility will remain a critical component for our district for at least the next two years, maybe three,” McFadden said. “In one fashion or another, we will use the flexibility for as long as it is around. The challenge will be to what degree the state will go back (to the way things were before). I actually think the funding flexibility has been the best categorical policy reform we ever had. By 2006-07, we were sort of getting out of control on the number of categorical programs in California. It was the fiscal crisis that forced us to go on this route – a complete restructure of categorical programs, probably for the better. We cannot and should not expect that we’re going to walk back into the categorical program realm in the same fashion in which we left it. That would be, in my opinion, poor policy. We can’t go back into the old realm where we were creating categorical programs left and right because some special interest group went to the Legislature and got attention. We need to look at this from a systematic standpoint. On the one hand, I like categorical programs, because they dedicate particular funding for a certain purpose. But on the other hand, too many categorical programs can be inflexible, and that’s what we were starting to see.”

To read the May 26 story in EdBrief about the RAND Corporation study, “Deregulating School Aid in California - How Local Educators Allocate Flexible Tier 3 Categorical Funds: Findings from 10 School Districts in the First Implementation Year, 2009-2010,” click the link below:
http://www.educationmediagroup.com/reports110526_135.php

To read the complete report, click on the link below:
http://www.rand.org/pubs/reprints/RP1426.html

Editor's Note:  Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writer in print, radio and television media.