In a decision that drew many tears, the Hope School District board voted Monday night to shed all students who transfer into the high-performing elementary district from outside its Outer State Street-area boundaries, except for the few dozen students who will be sixth-graders next year, and possibly their siblings.

The 3-2 decision in front of an audience of about 200 people was the tiny district’s answer to a statewide budget crisis that put a $400,000 hole in its $7 million discretionary budget.

The board’s decision came over the pleas of many transfer parents — mostly from the Santa Barbara and Goleta school districts — whose hopes to stay in the district comprising Hope, Monte Vista and Vieja Valley schools were kept alive by an 11th-hour fund-raising drive that generated $180,000 in just five days last week.

“To the board, we hope that you recognize the incredible giving power of the parents,” Hope School parent Chris Gallo said to the board Monday night before the trustees voted. “Give us an option that allows us to use it for the good of everyone without detrimental changes to our population, to our teachers and to our programs.”

But a majority of the board felt the district’s financial problems were too deep to be solved through fund raising.

“I am concerned about using our fund-raising efforts to balance our bottom line,” said school board president Todd Sosna.

“My primary responsibility is to families that live in this district,” he added.

School board trustees Elizabeth Owen and Tony Winterbauer agreed. Trustees Patricia Hiles and Scott Orlosky voted no. After the vote, several mothers in the audience cried and embraced.

For many years, the Hope district accepted transfer students with open arms, because doing so was financially beneficial — California paid the district on a per-child basis. Families from Santa Barbara and Goleta flocked to the Hope district, attracted by its high test scores and strong PTAs.

To many, the phenomenon was evidence that the Hope district — which includes the wealthy Hope Ranch enclave — had become a white-flight destination. Seventy percent of its students are white, while in neighboring Santa Barbara, 70 percent of the students are Latino.

Then, things changed. Because of the district’s rising property values and shrinking student base, the Hope district began generating enough money in property taxes to pay for its operations without state assistance. Put another way, Hope now benefits financially from serving fewer students under a funding framework known as “basic aid.”

Two years ago, with an eye toward entering into this enviable funding structure, the school board voted to stop accepting new transfer students. But the board grandfathered in the existing students, whom they said would be allowed to matriculate through the system.

Monday’s vote — which allows for the acceptance of the siblings of the roughly 65 sixth-grade transfer students provided there is room for them — essentially rescinds the grandfather clause. It means about 140 students must switch schools in the middle of their elementary years beginning in the fall. That will lower the district’s total student enrollment to about 990 from 1,175, and takes the district a big step closer to having to close a school.

It also means the district will be laying off teachers.

The decision is expected to have a slightly negative ripple effect on the Goleta elementary school district. As is the case in Hope, the Goleta schools benefit from lower enrollment numbers, and Monday’s decision means Goleta will be getting back about 50 students, said Goleta Assistant Superintendent of Business Ralph Pachter.

Fifty students wouldn’t be nearly enough to knock the Goleta district out of basic aid—Pachter put that estimate at around 300—but it could lead to the layoff of one or two teachers, he said.

Many transfer parents, perhaps sensing their fate, became emotional Monday night.

Parent Cindy Burns said the district was actively recruiting students just a few years ago.

“You used us for our money, and now you want to dump these inter-district families and their children,” she said. “We are people and our children are people, and dumping us the exact year basic aid flips over, to me, is very unethical.”

Parent Lori Blum said transfer families have been made to feel very uncomfortable.

“It feels like we are second-class citizens,” she said.

Parent Rachel Steidl expressed annoyance at the use of the term “released” to describe what would be happening to transfer students.

“We are not in jail, we want to be here — you are kicking us out,” she said.

But school officials insisted that a silent majority of parents in the district agree with the board’s decision to shed more transfer students. On Monday, one of them spoke up.

Michael Kling said that as a business owner, he understands the importance of making difficult cuts.

“It’s not popular — you don’t want teachers to go, friends to go,” he said. “Things have changed. … These are the decisions that we all have to make.”

Among the district trustees, only Orlosky suggested a way to keep the transfer students. He called for spending reserve dollars to balance the budget, saying California’s financial crisis amounts to a fiscal emergency. But he couldn’t get any takers.

Meanwhile, the fund-raising effort was spearheaded by Hope School parent Sharon Allen, who lives in the district. She said the idea arose a couple of weeks ago, at a school site council meeting.

On March 4, she held meeting at her house with about 25 interested parents. They drafted a letter that was widely e-mailed. By 8:30 a.m. the next day, checks were already coming in. By Monday, the group had surpassed the orginal goal of $100,000 by $80,000.

“This is just a positive attack to a problem that was handed to us by the state,” she said. “I want everyone to be optimistic.”

— Noozhawk staff writer Rob Kuznia can be reached at