Lagunitas School District trustees voted last week to put a parcel tax on the November ballot—critical funding for the district that still won’t balance an ongoing budget deficit that officials say is rooted in an unusually high number of special-needs students. Without the tax, the district says it would have to cut about a fifth of its budget, over $650,000, a move that would undoubtedly lead to layoffs.

The parcel tax would renew a previous eight-year tax that will expire in June 2018. The tax, initiated in 1997, needs a two-thirds majority to pass; last time, in 2010, it scraped by with just 67.44 percent of the vote. (Seniors can file for an exemption from the tax.) 

But even if the tax passes, the district has serious work to do: projections for the current school year and the following two show deficit spending totaling almost $400,000, assuming the tax is in place. 

That means that by mid-2019, the district would have just $131,580 in reserves if it does not reign in deficit spending. That amount does not meet reserve standards, as the district requires 8 percent of the budget, above the state-mandated 5 percent. 

The parcel tax, said trustee Denise Santa Cruz-Bohman, “will keep us where we are. Even with it, we have to cut. We have to do something.”

But curbing expenditures will not be easy, particularly given that 82 percent of the budget is dedicated to salaries and benefits. “We’re not overstaffed,” Richard Sloan, who has served on the board for over four decades, told the Light this week. “We try to have more adults in the classroom” than some other districts, because “we believe that’s part of providing a quality education.”

District Superintendent John Carroll cannot take a position on ballot measures, but he said he can provide facts. “And the fact is that we would need enormous budget cuts” if the parcel tax does not pass, he said. “It is a very hazardous time for us in terms of money… The district is very tightly budgeted.” 

The budget crunch substantially hinges on providing special education services. The district is spending half a million dollars, or about 13 percent of its budget, on special education this year. The vast majority of those funds cover just seven students with expensive needs that require one-on-one instruction all day, a different school that can serve their needs or special transportation (or some combination of those three services). The state and federal governments provide little funding to districts for special education.

For a district of Lagunitas’s size—it has about 260 students—Mr. Carroll said the number of severe special-needs students was unusually high. (Bolinas-Stinson Union School District, where Mr. Carroll is also superintendent, has no students with that level of need.) School districts are required to pay for the education of every student in the district, even when students require instruction elsewhere. 

“We have an unfunded mandate to pay for special education costs… Zero or one or two students would be normal for a district of our size. For us, it’s seven,” Mr. Carroll said. 

He was unsure why there was an unusual number of students with high-level special needs. About 10 percent of the student body has individualized education plans for less-intense services like speech therapy, which he said was normal for a district.

The district has other large costs, too. Mr. Carroll pointed out expenses such as providing bus service and cafeteria costs.

At a regular meeting of the board of trustees last Thursday, Ana Mendez, the chief business official for the district, said the end of a state program called District of Choice will also affect Lagunitas. Under that program, a participating districts like Lagunitas receive money for each transfer student it enrolls, money the students’ home districts do not receive. 

Two years ago, the district received roughly $58,000 through the program. This year, with the state winding down the program, Lagunitas is only receiving about $39,000, from transfer students from Ross Valley Elementary and Dixie Elementary Schools. In a couple of years, that cash flow will cease entirely.

Yet another contributor to the budget deficit that will grow in coming years is state-mandated pension contributions. The school must contribute to two state-run pension funds: the California Public Employees Retirement System, or CalPERS, which covers classified employees like janitors, and the California State Teachers Retirement System, or CalSTRS, which is for teachers.

A 2014 state bill aimed at remedying unfunded pension issues, A.B. 1463, bumped up the amount that employers pay into CalSTRS. During the 2014-2015 school year, Lagunitas paid 8.88 percent of teachers’ annual salaries into the fund. But that percent is rising dramatically: this year, the school must pay 12.58 percent, and by 2021 it will pay 19.1 percent.

CalPERS rates are also going up. Last fall, the district projected that contributions would rise from 13.88 percent this school year to 19.8 percent in 2023-24. But in December, the CalPERS board reduced projections for returns on its investments, meaning it will soon institute higher employer contributions. The district now estimates that by 2024, its contributions will rise to 28.2 percent.

How does that translate into the budget? During the 2014-15 school year, the district paid $617,000 in employee benefits. This year, that amount is estimated to be $706,000, and it is projected to rise to $798,000 by the middle of 2019. Not all of that is from the rising percent contributions; a substantive portion, Mr. Carroll said, is the result of employee raises, which lead to greater contributions.

Ms. Santa Cruz-Bohman said this week that the budget may not be as bad as it looks; projections can be conservative and spending can be less than estimated. 

“We’ve been in worse places,” Ms. Santa Cruz-Bohman, who has been on the board for many years, said this week. “Once we start the next budget cycle, we’ll talk about how to move forward.” If cuts do need to be made, she said those discussions will take place once the district has final spending for this year in hand.

Mr. Sloan expects the district will soon assemble a budget committee with teachers, administrators, staff, parents and trustees, which the district has done in the past when finances have been squeezed. “We get everyone together,” he said, “and we go over the budget and see what we might have to cut to make it balance.”