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# School district facing serious financial troubles
- URL: https://www.smdp.com/school-district-facing-serious-financial-troubles/
- Published: 2002-04-18T15:00:00.000Z
- Updated: 2026-10-23T00:14:37.000Z
- Author: Andrew Fixmer
- Tags: Education, Malibu, #archive-import

*Voters may be asked to increase parcel taxes by 250 percent over the next three years.*

Major tax hikes, lay-offs and program cuts loom for a school district reeling from statewide budget cuts.

And the board that oversees the Santa Monica-Malibu Unified School District will have to make some difficult decisions on how to bail the school system out.

In a memo to school board members Wednesday, Superintendent John Deasy provided details about how to make up for the $5 million deficit the district is facing over the next two years.

Deasy recommends a combination of budget reductions, tax increases and contributions from Santa Monica and Malibu, the two cities that make up the district.

According to Deasy’s plan, property owners would be asked on the November ballot to gradually increase their taxes by 250 percent over the next three years. The current tax of $101.14 would be increased to $360 by 2006.

The district also would ask Santa Monica to increase its annual contribution to the school district from $3 million to $5 million. Malibu would be asked to increase its from $27,000 to $250,000\. However, the school district may not get extra help from Santa Monica since it’s facing a $8.8 million shortfall in sales tax revenue this year.

“Failure to obtain the additional revenues suggested in this memo will prove to be the whole-scale elimination of programs,” Deasy wrote.

> “Failure to obtain the additional revenues suggested in this memo will prove to be the whole-scale elimination of programs.” — — JOHN DEASY SMMUSD Superintendent

In addition to tax increases, Deasy said the school board still must make budget cuts and enact a hiring freeze and phase out some non-educational faculty over the next two years.

“Regardless of which option you choose, you will face budget reductions in the next two years,” he wrote. “Our reduction strategy should be multi-faceted, which includes both revenue enhancement and budget reductions.”

Deasy wrote another proposal that would cut $4.3 million from next year’s budget, including eliminating about 30 positions throughout the district. Travel for athletics and music programs would be eliminated.

Deasy recommends that the school district reduce expenses for conferences and travel, consultants and capital improvements. Wages given to teachers for coaching sports or working with after-school groups also may be reduced or eliminated.

The budget shortfall stems largely from a drastic decline in state funding to school districts throughout California — which has been hit hard from last year’s energy crisis, the impact of the current business recession and fallout from the Sept. 11 terrorist attacks.

The state decreased its cost of living adjustment in funding from 2.5 percent to 1.8 percent Tuesday, cutting an additional $300,000 from the district’s budget next year.

In addition to decreased funding, the school district is facing increased expenses. The school district is being asked for the first time in nearly a decade to pay into the retirement system. Deasy said health insurance costs and worker compensation insurance have also increased, while Federal aid from the 1994 Northridge Earthquake has run out.

Last year the state made mid-year budget reductions, and warned that more decreases in funding were coming. School districts across the state were warned to start making budget cuts.

“We have also been squeaking by with cuts/band-aids for years, thus we have failed to build any significant reserves,” Deasy wrote.

Another plan asks the school board to increase the number of students in the district because the state pays almost $5,000 per student. The plan calls for increasing the student body by 600 students a year and making 25 percent of the needed budget cuts.

However, the school board recently enacted a policy eliminating approximately 300 students a year to relieve congested classrooms throughout the district.

*Originally published in the Santa Monica Daily Press print edition on April 18, 2002.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/041802.pdf?ref=smdp.com)