CUTTING TO HURT SCHOOL OFFICIALS WINCING.

Byline: Naush Boghossian Staff Writer

SANTA CLARITA - Local schools are bracing for midyear budget cuts from the state, as well as a second round in the next school year that could lead to larger class sizes and pared staffing levels.

Gov. Gray Davis' proposed midyear reduction of more than $1.5 billion in school funding portends several difficult years for the state's public schools - a funding crisis that career administrators call the worst they've seen.

``I've been doing this for 22 years, and I have seen the state's economy go up and down, and certainly we've had to deal with financial times that have been less than beneficial for schools, but frankly this is the worst that I've seen,'' said Robert Nolet, superintendent of the Sulphur Springs School District in Canyon Country.

While administrators don't know what specific programs the state will cut, they realize that large-scale cutting will have a tremendous effect on their budgets. The Legislature is expected to act on the governor's proposals for midyear cuts by the end of this week.

``We're in a limbo position right now,'' said Newhall School District Superintendent Marc Winger. ``What we've been told is the magnitude of the cuts is probably correct. How they're going to come at us is what we're waiting to hear.''

Since the cuts come halfway through the budget year and the schools are committed to staff, district officials likely will have no option but to freeze hiring, many expenditures, staff-development programs and expenses for conferences and travel to shore up their reserves.

Districts are required to maintain a reserve equivalent to at least 3 percent of their budget, and smaller districts generally maintain a 5 percent reserve.

Administrators are hoping that cash accumulating in their reserves will cushion the financial hit for the rest of this school year.

``You can't lay off teachers - end of story - and that's where most of the money goes,'' Winger said. About 85 percent of the Newhall district's budget pays for personnel.

But officials with the Santa Clarita Valley's five school districts say layoffs might be unavoidable for the next school year once they've depleted the cushion in reserves.

``We'll have time to plan for next year, and then we're talking about staffing ratios and layoffs,'' Winger explained.

The Castaic and William S. Hart Union High School districts expect that growth in enrollment will bring in enough revenue to soften the blow of the cuts. The state pays school districts per attending student.

Castaic School District officials plan on cutting $500,000 from the operating budget, but expect enough growth to get through the midyear shortfall.

``We're bigger than we anticipated, so we'll absorb a lot of it through our ending balance,'' said Castaic Superintendent Beverly Silsbee. Officials also expect the district's student population to grow by about 9 percent next year.

Officials in the William S. Hart Union High School District has added about $2.5 million to its reserves to cover cuts estimated at $2 million to $3 million. They are hoping layoffs won't be needed.

``If we grow by a thousand or 1,500 students, we may not hire teachers, but we'll redistribute them,'' said Rory Livingston, the director of business and fiscal services for Hart. ``If we don't see any growth we have to lay off people, but we are assuming we'll grow at the same rate.''

Castaic officials plan to give teachers notices, so layoffs could come if necessary, but are hoping there won't be any.

``We're lucky to have growth, and we hope to absorb all those teachers through growth,'' Silsbee said.

Administrators also expect some teachers to quit or retire, and, if money is lacking, to reshuffle personnel rather than hire replacements.

The proposed cuts come even as new schools are being built or planned to accommodate growth in valley districts.

While local construction bonds and developer fees are financing most construction costs, officials worry that districts opening schools in the next year or two won't have the money to hire teachers, buy books and pay other expenses to operate them.

The Newhall district - which will open two new schools this year and switch to a single-track calendar - is anticipating about $1 million in cuts and expects to tap its reserves to absorb the blow, representing about 6 1/2 percent of the $39 million budget.

In a letter to parents, Newhall district officials equated $1 million to the salaries and benefits for 16 teachers, utilities for a full year or the purchase of textbooks for one year.

``We'd have to eat into our reserves, and that's a dangerous thing,'' Winger said. It will cost the Newhall district about $500,000 to open each school, plus ongoing costs for personnel, books, computers and supplies. ``That means we have to make deep cuts next year to put up with a second round of costs.''

Hart's Rio Norte Junior High will open on schedule in August, but the district doesn't know how much money it will have to staff the campus.

Local elementary school districts face a decision on whether to eliminate class sizes of 20 pupils.

Schools may opt out of the program for the 2003-04 school year, but administrators are hoping that the state will offer them flexibility with the ratio.

``We're on a strict 20-student cap. If we had flexibility we could staff better,'' Winger said. ``Even then I'm not sure we can save class-size reduction.''

If, for example, the state increased the cap to about 25 students per teacher, the program would come closer to paying for itself.

``At that point, the state reimbursement comes far closer to paying for it,'' Nolet said. The Sulphur Springs district would spend about $700,000 more than what it receives from the state, out of its general fund, to support class-size reduction.

The governor proposed a 10 percent cut in class-size reduction funding this year and next. Already, the districts have to supplement that expenditure.

The state also seems to be phasing out support for multitrack, year- round schools, a problem for districts that adopt the calendar to increase capacity at overcrowded schools. Newhall is dropping the schedule in the next school year, while about half of Sulphur Springs' schools are year-round.

``That adds an additional compounding effect,'' Nolet said. While it is less expensive to operate a single-track district, it is expensive to expand schools to accommodate growth.

School district budgets for the 2003-04 fiscal year are due to the state by July 1, but educators don't expect the state to pass its own budget on time. If, as has happened in past years, the state is two or three months late on its budget, the schools will have to guess how much money they'll have.

``This is not the year for the state to have schools shooting in the dark,'' Nolet said.

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MAJOR CUTS EXPECTED