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San Diego City Schools Dodge Bullet But Still in Deficit

December 15, 2011

It looks like City Schools’ outlook won’t be as bad as some were projecting they would be, but there will still be major deficits.  I expect that as the full cuts begin to be felt there will be many school districts all across California who will be in dire straits.

I heard on NPR on the drive home that LAUnified has filed a lawsuit against the state because of the automatic cuts and that other school districts are looking to join.  There should be plenty of legal fireworks over this automatic hacking away at public school funding.  Poor school districts and neighborhoods will almost certainly feel more pain than wealthy ones, but that is the way of the world in these times, in all times actually.

VOSD has a piece out about the funding over at their site, it is well worth a read, especially if you are an SDUSD teacher.

When the news came in this morning in that Gov. Jerry Brown would be making far smaller cuts to state education funding than previously expected, there were grins all round at a school board workshop at the San Diego Unified School District’s headquarters.

But Ron Little, the district’s CFO, wasn’t smiling.

Reached after the workshop for a scrambled 30-second interview in the corridor, Little confirmed that the district must still cut at least $60 million from its budget next year. A district spokesman later upped that estimate to $73 million.

And there’s the rub.

That state’s cuts are considerably smaller than they could have been gives the district some breathing room, but all the move really does is turn what was a huge problem into a really big problem.

Superintendent Bill Kowba had presented the midyear cuts as the tipping point towards insolvency for the district. With huge cuts, the district could likely have been forced into insolvency, he told the school board last month. Without them, the district can survive.

But survival is relative. In this case, the district must still cut that $73 million out of its budget in order to survive through next year. That’s an awful lot of money, and there are basically only three places the bulk of it can come from: More revenue from the state, concessions from employees or layoffs.

The governor has proposed a tax hike that could send more money to schools, but he’s run into problems getting the two-thirds majority vote in the Legislature to get it on the ballot.

Then there are concessions. A big part of the school district’s deficit next year is a double-whammy of promised employee pay increases and the expiration of five unpaid days off that will cost the district about $26 million next year.

With the vanishing specter of the midyear cuts, attention may now begin to focus squarely on whether the unions will be willing to renegotiate that deal. Without such renegotiation, the district could have no choice but to resort to layoffs.

By Thursday, the district has to send a preliminary version of next year’s budget to the County Office of Education, which acts as a financial overseer of local school districts. That document must spell out what cuts the district will make to balance its budget.

Because the unions haven’t agreed to reopen their contracts, the district can’t include savings from possible concessions in that document. Instead, it must detail how many people will be laid off to balance the budget.

The school board plans to vote on that document, called a “first interim report,” tonight. In its current form, the report calls cutting up to 700 employees, including teachers and campus police officers.

Little is currently scrambling to see if he can rewrite the report in the light of today’s news from Sacramento.

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