By Raiza Giorgi 

A revision to the state’s Education Code on July 1 promises significant financial relief for the Santa Ynez Valley Union High School District but may also mean a significant funding reduction for Olive Grove Charter School.

The change comes through an education omnibus budget trailer, Assembly Bill 75, that Gov. Gavin Newsom signed on July 1. The Santa Ynez district lobbied for the change.

“This is nothing short of a miracle, and it is the long-term solution that we were hoping would happen. Thankfully, it happened sooner than we anticipated,” said SYVUHS Superintendent Scott Cory. 

The change goes into effect for the 2019-20 school year that begins this fall, Cory added. 

Both the Santa Ynez and Santa Barbara school districts were told in December that they would need to pay some of their tax revenue to help support Olive Grove Charter School because it operates within their district boundaries. 

The Santa Ynez district was told it could expect to make annual payments in excess of $1 million, which Cory said could bankrupt the district.

Olive Grove, with a reported enrollment of about 750 students countywide, operates a campus in Buellton and other campuses from Santa Maria to Santa Barbara.

The key part of the regulatory change is that the Santa Ynez district must pay Olive Grove only for the charter’s students who live in the SYHS district, not for all the students that attend the Buellton campus.

It remains unclear whether Olive Grove would be paid more by the state or other school districts under the new Education Code element, or whether it would lose money with reduced payments from Santa Ynez.

The Buellton campus serves about 95 students, with a budget of $1.2 million. Olive Grove’s total budget is approximately $8 million for all its locations, according to CEO and Executive Director Laura Mudge. 

According to Cory, the number of students reported as residents of the Santa Ynez district is about 20, compared with the 84 on the Buellton campus reported by Olive Grove to the California Department of Education. 

“This means that Olive Grove can only count the students that are ‘in-residence’ of our district and not all of their students … a large portion reside outside of our area, such as San Luis Obispo. Moving forward, the payments will be substantially less, however, still an issue,” Cory added. 

Olive Grove representatives didn’t respond to the Star’s request for comment on the new developments.

According to Cory, the most recent estimates say that Santa Ynez owes $746,792 to the charter school for the 2018-19 school year that just ended, compared with Olive Grove’s initial projection of between $1 million and $1.2 million. Those numbers remain subject to change, and Cory said some additional relief could lower the Santa Ynez payment to $552,669. 

The charter school gained approval to operate from the state Board of Education after rejections from multiple local school districts, including Santa Ynez.

The Santa Barbara and Santa Ynez districts were hit hardest because they are “basic aid” districts, whose budgets come from local property taxes rather than from state aid based on “average daily attendance.”

Other districts, including Lompoc and Santa Maria, also are required to pay Olive Grove, but their payments are reimbursed by the state.

While both the Santa Ynez and Santa Barbara districts balked at paying, Santa Barbara ultimately sent a payment to the state but Santa Ynez has held off, citing financial concerns. 

The charter school filed a complaint for declaratory relief against Santa Ynez on March 14 in Santa Barbara County Superior Court, seeking more than $428,119 in in-lieu property tax payments. Olive Grove’s lawsuit also seeks “other and further relief as the court deems just and proper.”

“The court process is still ongoing, and there isn’t a date set yet. We are seeking more detailed accounting of the students before we make a payment,” Cory said. 

Noozhawk North County Editor Janene Scully contributed to this report. She can be reached at