The Lagunitas School is facing a mounting deficit after a recent law forced it into a financial predicament. Until last year, the school’s spending was in good shape, buoyed by the San Geronimo Valley’s booming real estate market and a smaller enrollment. But then changes to state education finance law saddled the district with the cost of valley students attending the Ross Valley Charter School in Fairfax.
This year, the district is paying $138,000 to send students to R.V.C., a four-fold increase over last year and equivalent to a 3 percent raise for its entire staff.
“This could push us toward layoffs at a time when our funding has never been better,” said John Carroll, the district’s superintendent.
The law, passed in late 2019 as part of S.B. 75, shifted regulations to require basic aid school districts—those whose local property tax revenue exceeds the general funding they would receive from the state—to pay for resident students who attend state-authorized charter schools. Though they are generally wealthier, basic aid districts rely solely on property taxes and get no additional funding for students who transfer in from outside their boundaries.
A few idiosyncrasies came together to make the new law especially harsh for Lagunitas. A small district, Lagunitas happens to be next door to one of the few charter schools in the state that was formerly overseen directly by the California Department of Education. Shoreline Unified, also a basic aid district, is required to pay for R.V.C. students within its boundaries, but it is both larger and further from the charter. Fairfax’s Ross Valley School District surrounds the charter, but for now, it is not a basic aid district, leaving it off the hook for charter school students.
“It’s hitting Lagunitas harder than anywhere else just because of our geography,” Mr. Carroll said. “Other districts can absorb the cost, or the charter schools are farther away.”
Lagunitas school officials said they doubted whether state lawmakers had districts like theirs in mind when crafting the new rule. “What they see is a student who’s moving into a charter school environment; therefore, those dollars are no longer needed in the original district,” board president Amos Klausner said. “What the politicians don’t understand is that it’s not that simple. Staffing tends to be the largest expense, and you still have to keep the lights on, keep the rooms heated. None of those expenses go away when you lose three, four, five students. I’m not sure that the politicians really thought about that.”
This year, Lagunitas paid roughly $8,000 per student—the current state-mandated amount—for 17 valley residents to attend the charter. The loss pushed the district deeper into a deficit that caught the eye of the Marin County Office of Education this year. By the 2023-24 school year, the district is projected to face an operating deficit of more than $107,000.
“We note this [budgetary] decline is primarily driven by a significant increase in the number of district resident students who attend a charter school,” Superintendent of Schools Mary Jane Burke wrote in a budget approval letter sent Jan. 14.
Earlier this month, Mr. Carroll wrote pleas to state senator Mike McGuire and Assemblyman Marc Levine, asking them to introduce legislation that would reverse the effects of S.B. 75 on Lagunitas, though he recognizes it represents a tiny problem on the state level.
“We’re not just the tail trying to wag the dog, we’re like a flea on the tail,” he said. “I don’t think Gavin Newsom’s up there saying: ‘Good old Lagunitas, what can I do for them?’”
Mr. Carroll also got in touch with R.V.C.’s director, Dr. Page Hersey, hoping to make a change to the arrangement. He said he understands the charter depends on these funds, and he blames the state, not the school, for the issue.
But Dr. Hersey told the Light that the charter would continue following state protocol by billing Lagunitas. It would be difficult to make any changes, she said.
“From the numbers that we’ve looked at, it does look like Lagunitas gets a little over $10,000 per student through their basic aid funding, so they’re getting more per child than they would actually pay to us,” Dr. Hersey said.
She added, “We’re providing a choice in public education. We’re just following the guidelines of how we receive funding for those students. I’m not sure there’s much more to it than that.”
Mr. Carroll said the Lagunitas budget is based on property taxes and doesn’t change based on enrollment, so every charter school student the district pays for represents a loss.
The situation is especially difficult for Lagunitas because of its unpredictability: only four students attended R.V.C. last year, but that number quadrupled this year. As a result, the charter’s bill shot up from $31,000 to $138,000. Mr. Carroll said budgeting “based on decisions we have nothing to do with” is nearly impossible and wreaks havoc on staff negotiations.
“When I got to the negotiating table [last fall], I had to go: ‘Sorry, I spoke too soon. It’s worse than we thought,’” he said. “This year, we had to give a raise that I’ve already signed off on, even with this deficit that we’re showing.”
At a board meeting last week, Mr. Carroll discussed the reasons why parents might choose the charter. Lagunitas only offers half-day kindergarten, which is inconvenient for some parents and which he said he will seek to change. What’s more, many valley residents commute over the hill, passing by the charter school.
There were other factors left unsaid that may have influenced some parents during the pandemic. Last year, elementary school teacher Jill Conroy was dismissed without explanation from the Montessori program over protests from dozens of parents. Ms. Conroy now teaches second and third grade at R.V.C. Three other kindergarten and first grade teachers at the charter live in the valley.
Additionally, a sizable contingent of parents were dissatisfied with the school’s pandemic response. Lagunitas became the last elementary school in Marin to reopen campus last year, as its union pushed to wait until all its teachers were fully vaccinated.
The situation now faced by Lagunitas stems from a complex series of state laws that reflect changing policies toward charter schools. The Charter Schools Act of 1992 aimed to promote innovation, stimulate competition between schools and provide more choices for parents. The act required the state to authorize charter schools that had been denied locally if they could prove they would be successful. R.V.C. is one of just 25 charters in California that were authorized by the state Board of Education after being denied at the local level.
But over the last few years, the state has stopped managing the charters it authorized, shifting fiscal control and oversight to county offices and local districts. Last July, the Marin County Office of Education took charge of R.V.C., becoming the first county agency in California to oversee a charter school.
“We’re on the frontier of this,” said Terena Mares, deputy superintendent at the Marin County Office of Education. She said the education officials are still uncertain how these state-authorized charter schools will be funded or overseen when their five-year charter terms expire.
With S.B. 75, California also placed more funding responsibility for state-authorized schools onto basic aid districts like Lagunitas. “At the end of the day, the state doesn’t have much sympathy for districts that get excess property taxes beyond their allotment,” Ms. Mares said.
Next year, Ross Valley School District will become a locally funded basic aid district because of its growing tax base. When that happens, the district that surrounds the charter will also need to pay for charter students within its boundaries, and the bill will likely be significantly higher than the one sent to Lagunitas.