Natomas Unified School District officials probably know better than any other in California the importance of Gov. Jerry Brown's proposed tax extensions.

Voter approval in June has the power to pull this small Sacramento-area district of 10,000+ students back from the brink of bankruptcy. If the proposition fails, state funding to K-12 education could be cut 6 percent – or more – and two local legislators are poised to introduce legislation in the coming weeks that would empower the state to take over the cash-strapped school district in Natomas.

While school districts statewide will be equally impacted if Gov. Brown's propositions fail to pass, Natomas Unified will financially be out of time. The question is: Can the community, more specifically California voters, save the school district from bankruptcy?

“The process of a state takeover has begun,” said Bruce Roberts, Natomas school board president.

The Natomas Unified School District has 13 schools and is home to four independent charter schools which have, in part, contributed to a decline in enrollment at its traditional campuses. The district's history of controversial budgeting practices, coupled with the collapse of the housing market and ongoing cuts to funding at the state level have created what some have described as a “perfect storm” in Natomas education.

State education code requires school districts show a balanced budget three years out and when Natomas Unified failed to do so for the 2011-12 school year, Sacramento County superintendent David Gordon started bankruptcy proceedings. Despite recent concessions by its employees – in the form of layoffs, increased class sizes, furlough days and pay cuts that balanced the budget for 2011-12  – Natomas Unified coffers cannot sustain the district into 2012-13 with its current proposed budget. Gordon fears the school district will be crippled if Gov. Brown's proposed five-year tax extensions are not approved by voters.

“I keep emphasizing to the district they have to be prepared and plan ahead,” Gordon said. “It is difficult to stay solvent if you do it for one year and just squeak by.”

Gordon knows going back to the bargaining table so soon after striking a deal is not easy, but says Natomas Unified has to budget for “automatic inflators” such as annual step and column pay raises and insurance premium increases in 2012-13. The school district, he said, also needs a contingency plan in the event tax extensions are not approved for the 2011-12 school year. The teachers union expects to resume contract negotiations in February and the classified employees union is scheduled to be at the table in March.

“The county assured the Natomas Teachers' Association that state receivership would be avoided if teachers contributed 7.9% to the budget deficit,” teachers' union president Cynthia Connell said. “The community which rallied together to urge teachers to take these cuts must finally understand that teachers cannot save this district; they've been misled to believe we can.”

In recent years, Natomas Unified has laid off dozens of employees. The school district has also reduced funding for athletics, cut stipends for extracurricular activity advisers, eliminated summer school programs, discontinued all school busing except for special education students, closed all elementary school libraries and one school.

Parent groups and the Natomas community have rallied in response to support their neighborhood schools. Fundraisers are held to pay for school supplies, equipment and field trips. Most recently, enough money was raised to temporarily reopen some school libraries for limited use. Natomas Unified superintendent Bobbie Plough is moving forward with plans to renegotiate agreements with the charter schools and earlier this month hosted a community meeting to generate additional fundraising ideas.

“I’m glad that our teachers and classified employees made generous concessions this year, but we need to fix our long-term budget problem to prevent a state takeover,” said Ryan Herche, a Natomas resident and former school board candidate who attended the meeting. “We can raise new revenue by opening school property for advertising and applying for grants.”

Herche, who repeatedly called for an audit of Natomas Unified accounting during his campaign for school board last year, believes the school district can save money by changing its competitive bidding process and by using district employees, instead of contractors, when it proves more cost effective.

“Doing business 'the way we've always done it' has caused a fair share of our financial woes,” added Connell. “It is going to take changes in policies and practices at the district and board level to turn around the years-old practice of deficit spending.”

Work toward a balanced multi-year budget continues at the school district level. Meanwhile Assemblyman Richard Pan, District 5, and Assemblyman Roger Dickinson, District 9, plan to jointly introduce a spot bill in February that would authorize a state takeover of Natomas Unified. Pan said the legislation is a placeholder that will be enacted only if necessary to keep the school district solvent.

“We would like to avoid a state takeover,” said Pan, a Natomas resident with two young children. “We also don't want the district to go under. I am hopeful that is not going to happen.”

Pan and Natomas Unified plan to hold a town hall meeting Feb. 17 about the state budget, the proposed tax extensions and the assemblyman's role in the state receivership process. Even if the district manages to make more budget cuts for 2012-13, parent volunteers like Scott Dosick, who serves on the school district's budget advisory and bond oversight committees, say they understand the depth of the school district's financial woes and what would come with a state takeover – more layoffs, larger class sizes, school closures and negative impacts on the community. They also know the future of Natomas Unified likely hinges on whether Gov. Brown's proposed tax extensions will be passed or voted down.

“That would represent a cut of $3.5 to $4 million dollars for the Natomas Unified School District,” said Dosick. “This would be beyond catastrophic – I don't even know what word to use.”