Schools Brace for a Cliff as Stimulus Money Peters Out

Schools Brace for a Cliff as Stimulus Money Peters Out

Millions of stimulus dollars that helped school districts across San Diego County survive this year and patch together their budgets for next year are drying up next summer, leaving districts that relied on the money to pay teachers or other employees fending off deficits as deep as before.

It is a new, if predictable, threat. Financial wonks call it “the funding cliff” — and school districts are now headed straight toward it.

“The reality is, all the stimulus did was save us for a few years,” said Dianne Russo, chief financial officer for the Sweetwater Union High School District.

When San Diego County school districts got roughly $360 million in federal stimulus money to help them cover last school year, this one and the next, the money came with clashing advice: Schools were supposed to save jobs. But they were also cautioned that since the money would run out, they should try to invest it in sustainable and innovative programs that would last beyond the funds.

Investing in training or data systems was difficult to stomach for districts that risked losing hundreds of employees. Instead, nearly half of California school districts said they spent the bulk of their stimulus money to prevent teacher layoffs, according to a survey by the state legislative analyst last fall.

In San Diego County, school districts saved more than 1,600 jobs with that money between January and the end of March this year alone, according to a voiceofsandiego.org analysis of California Department of Education data.

“School districts are in survival mode,” said Lora Duzyk, an assistant superintendent for the San Diego County Office of Education. “And this was a lifeline.”

The problem is things aren’t guaranteed to get better soon for California schools. Monica Henestroza, who oversees government relations for San Diego Unified, called the state budget forecast “fuzzy.” California legislators could still pass bills or postpone tax breaks to spare schools. But Congress has dampened hopes for a second infusion of school stimulus money.

“Unless something fairly drastic happens at the state level, schools are going to be in a world of hurt,” said Terry Anderson, associate vice president of School Services of California, which advises districts.

San Diego Unified, for instance, used a chunk of its stimulus money to pay for more teachers to handle smaller-than-usual classes. One hundred and sixteen teachers’ jobs hinge on the experiment. Seven of those teachers are at Central Elementary, a City Heights school that has one of the highest poverty rates in the school system. Most of its children are learning English.

Central credits the smaller classes for student gains on district tests, and Principal Cindy Marten is waiting to see if state scores jump too. But because the funding will evaporate next summer, the San Diego Unified school board will have to weigh whether to cut the pilot program to save an estimated $12.5 million or find another way to pay for it out of its own funds.

“I never set out asking for stimulus dollars,” Marten said. “But I want to keep fighting to keep my teachers here. Losing seven teachers means the revolving door begins again.”

San Diego Unified is also using stimulus money to pay for some counselors and coaches who help teens take classes online. That money will also be tapped by next summer, putting those jobs in jeopardy. The school district now predicts that it will suffer a $127 million deficit after the stimulus funds are gone, rivaling the deficit it just closed.

Grossmont Union High School District spent most of its nearly $16 million in stimulus money on teachers, fiscal services director Ken Leighton said. The funding cliff means that Grossmont is bracing for an even bigger deficit when the stimulus runs out: It cut $18.2 million for the coming school year and expects to cut $21.4 million the year after.

Sweetwater also leaned heavily on stimulus money to lessen teacher layoffs. It used $20.7 million in stimulus money to help cover a roughly $31 million budget gap for next school year. Next, it will grapple with a $25 million gap — and no stimulus to help plug the hole.

Leighton said that as the money disappears in Grossmont, the district will try to spare jobs by spending down its reserves and negotiating with its unions for more cuts. In Sweetwater, Russo also expects that schools will have to bargain with unions to furlough workers or whittle down salaries.

“I don’t see new dollars anywhere,” said Duzyk of the County Office of Education. “More likely, if school districts sunk these dollars into ongoing costs, they will be making more cuts.”

Not everyone is expecting worse pain the year after next: Vista Unified schools used stimulus money to foot the bill for at least 178 employees, but the school system predicts it will have to slash less money from its budget a year from now because it made ongoing cuts such as shortening the school year and increasing class sizes.

Similarly, Chula Vista Elementary School District expects to slash $7.5 million when the stimulus disappears — roughly half of the deficit it closed for next school year through furloughs and other cuts.

Please contact Emily Alpert directly at emily.alpert@voiceofsandiego.org and follow her on Twitter: twitter.com/emilyschoolsyou.

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