For Belmont-Redwood Shores Schools, Success Breeds Distress

Let’s say you’re put in charge of a local organization that has done well over the years, but has pretty much stayed the same size for about as long as anyone can remember.

Then imagine that, thanks to the Internet, word gets out that you’ve got a great product and suddenly new consumers are banging on the doors. 

A mob of customers holding fistfuls of cash and demanding you take their money is a nice problem to have.  At least that’s what I’m told.  If you can deal with the usual growing pains you could find yourself in charge of something that’s both successful and profitable. 

That is, of course, if the organization happens to be a successful revenue generating business.  If it’s instead a rapidly growing public school system in California, such success may be rewarded simply with a financial crisis.

Such a punishment is precisely what faces the Belmont-Redwood Shores School District (BRSSD) today – one caused by its success and off-the-charts increases in enrollment.  It’s a small irony, I know, but one that still amazes me as much today as it did when it first sunk in many months ago. 

As a parent here in Belmont of a third grader and of twins waiting in the preschool farm league to join Kindergarten next fall, I’d decided earlier this year to look into the current financial state of the BRSSD.  What I’d found was both impressive and, well, a bummer.  To recap:

First, The Good.

Locals knew for decades that Belmont and Redwood Shores schools were great.  But starting around 2000 the district scored highly in California’s new Academic Performance Index (API) tests and improved on these scores every year since.  

Word travelled fast, and Belmont-Redwood Shores has become the fastest growing elementary school district in the county by far.  Student enrollment jumped by nearly 1,300 since 2005 to over 3,600 students today – a 53 percent increase.  Put another way, the district is over half again its size only seven years ago. 

The district will likely keep growing for at least the next several years.  Besides, what isn’t there to like?  Families are still attracted to great schools in two coveted Peninsula cities with homes & rentals that don’t have Palo Alto- or Menlo Park-sized price tags.

And, just two weeks ago the state published its latest API results for the past year, with the BRSSD carding an envious 917 score, its highest yet. 

Everything now should be unicorns flying over rainbows and high fives, right?  Well, they are in a way… right now.  While students here by all measures receive a great education, in the background the district today struggles making ends meet while fulfilling its obligation to seat each of these eager incoming students.

The reason is simple, really.  The school district basically lives on a fixed income.  A relatively stable amount of tax revenue and donations (plus what little comes from Sacramento or D.C.) is what it has to work with each year, whether it seats 360 students or 3,600.

More students naturally means more teachers – over three dozen more since the BRSSD enrollment boom began not long ago.  More teachers means higher total expenses.  Higher expenses means you need more cash to pay the bills.  That last part hasn’t happened, because the district’s revenues don’t meaningfully increase with the numbers of students.

Since local property taxes fund a large majority of California school budgets, districts like ours hope for some amount of real or re-indexed appreciation in property values every year to stay ahead of the game.

Which is fine when local economies grow.  Protracted recessions, though, end up busting school budgets.  Property tax revenue is at best flat since around 2008 or so, and total district revenue really hasn’t budged since the days when Washington Mutual branches and Lehman Brothers were both still around.

Which leads us to where we are today, and The Bad. 

An already fiscally lean and well-run district now finds itself about $2.5 million short for the current school year.  That’s including revenue from two parcel taxes voters generously passed in each of 2004 and 2008.  It also includes the $2.3 million or so of voluntary over-and-above-the-call-of-duty contributions parents and others make to the local School Force foundation and PTA combined each year. 

Currently, any incremental dollar saved or raised today can stave off some pretty bad scenarios tomorrow.  One very likely bad scenario goes like this:  Every day that teachers don’t come in to teach saves the district about $100,000.  So, 12 days of shuttered schools are contemplated to halve this deficit next year.  The other reductions may have to come from a lot more kids inside each classroom – perhaps 30 to 36 students to one teacher -- via resulting instructor layoffs.

It’s hard to say what total effect such cuts would have on school test scores and general quality.  You can make a good argument that it won’t be very pretty. 

It doesn’t have to end this way, of course. 

What to do?  Well, lots.  School Force and the PTA are looking for a seventh or eighth or ninth gear to put fund raising into to help bridge the gap.  So, donate!  Operators are standing by.  Or some websites.  One of the two.

Beyond that, there’s always asking Sacramento for more funding.  Ha, sorry, of course I’m joking.  The reality is that Sacramento is now seeking to increase its annual so-called “Fair Share” take from districts’ own property tax funds.  As only one example of this, if Prop. 30 doesn’t pass next month Sacramento has promised to demand over $1 million more each year from the BRSSD than it does today. 

No matter what happens after November 6, the district finds itself no less than $2.5 million short right now.  This amount will only grow in each year to come due to still increasing enrollment and more promises of disappearing funding.

At some time in the next year you may start hearing about plans for a parcel tax to move the BRSSD from the red to the black.  Not only do the existing parcel taxes expire relatively soon, new funds clearly are needed to keep the district solvent.  No one really likes talking about taxes – whether they’re new ones or just renewals of old ones.  But here’s something else to keep in mind:

Luckily, Sacramento legally cannot get its hands on any funding a district gets from donations or its foundations, or from its own parcel tax revenue.  What we raise locally will stay locally, and will directly fund and reward our great Belmont-Redwood Shores schools. 

And isn’t rewarding success instead of punishing it what it’s all about?