Stop Panicking, No One’s Going Insolvent, Says School Board Prez

 

After Scott Barnett cancelled his scheduled press conference this morning to announce his insolvency plan, school board president John Lee Evans pounced, setting up his own press conference in its place.

Barnett was all set to publicly announce his plan to ask the San Diego Unified School District to voluntarily declare itself insolvent, a scheme he unveiled to me yesterday afternoon. Evans took the opportunity this morning to pour scorn on Barnett’s ideas, saying he wanted to tamp down any rumors that the district might be about to declare itself fiscally bust.

“One board member is panicking and saying we need to declare insolvency,” Evans said. “I am here to say that we will balance the budget and we will do the very best we can academically with our limited resources. We must avoid denial and panic.”

Not that long ago, Evans and his fellow board members sat quietly by as Superintendent Bill Kowba solemnly told a school board meeting that the district was “at the edge of the cliff, looking over and down at insolvency.”

At today’s press conference, Evans was asked what has changed since that point a few months ago. His answer: The district wasn’t hit with painful midyear “trigger cuts” at the end of last year.

That’s true, but in many other respects, the district’s in a worse place now than it was then.

For starters, it’s planning to lay off more than 1,600 employees. It’s also facing a state budget that relies on a tax measure to keep funding for education at last year’s level. And state revenues have been coming in billions of dollars short, spelling bad news for all state-funded programs, especially education.

Nonetheless, Evans said the district will continue to plow ahead.

Declaring insolvency, as I examined in my story yesterday, would saddle the district with debt for decades to come. It would also strip the elected school board and the superintendent of their powers, placing the administration of the district in the hands of an appointed state administrator.

It’s a pretty noxious option, especially since that administrator would only have the same options available to balance the budget as the school board does.

Nevertheless, that option sounds attractive to Barnett, who says his colleagues on the board refuse to make the sort of tough decisions needed to save the district, without destroying it. Barnett says it’s about time for a new system of leadership for the district, since the school board has spent the last few decades running local schools into the ground.

I quizzed Evans about this: After all, I said, plenty of local school districts are doing OK, despite recent cutbacks in state funding. And, as we reported last year, state funding hasn’t actually been decimated in the way Evans and others like to say. It’s actually only recently declined after experiencing a big run-up during California’s loony real estate bubble.

Evans said the best comparison for San Diego Unified is not school districts like Poway, which recently reinstated summer school, isn’t laying off any teachers this year and has benefitted from labor peace. Instead, San Diego unified can only fairly be compared to other large, urban school districts like San Francisco and Los Angeles Unified.

That’s a fair point.

On the whole, large California districts are certainly in similar trouble. Los Angeles Unified has issued layoff notices to 9,500 educators. San Francisco Unified has issued 485 notices.

Evans also sought to play down the board’s role in creating the current fiscal mess. A big chunk of the deficit the district is facing this year is due to a risky salary deal the board negotiated with labor unions in 2010.

Evans said that deal only accounts for about $21 million of the district’s estimated $122 million deficit. That may be almost true for the 2012 – 2013 school year (official district figures put the figure at $26 million) but, as things stand, those raises will cost the district $53 million the following year.

That’s in addition to the second element of the 2010 deal, which next year eliminates five furlough days teachers have taken for the last two years. The elimination of those furloughs will cost the district $19 million a year.

Evans and other board members may seek to point fingers at the state for cutting spending, but the deal they negotiated accounts for about one-third of next year’s deficit and more than three-quarters of the looming 2013 – 2014 deficit.

Evans said he is committed to leading the district through a “rational, thoughtful” process to fix its current budget problems. I asked him whether that means he will consider forcing pay cuts on employees once the district’s contract with the unions expires next June.

He said it would. “We will do whatever it takes,” he said.

Will Carless is an investigative reporter at voiceofsandiego.org currently focused on local education. You can reach him at will.carless@voiceofsandiego.org or 619.550.5670.

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Will Carless

Will Carless

Will Carless is the former head of investigations at Voice of San Diego. He currently lives in Montevideo, Uruguay, where he is a freelance foreign correspondent and occasional contributor to VOSD. You can reach him at will.carless.work@gmail.com.

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10 comments
ScrippsDad
ScrippsDad subscriber

And - the hammer really really really drops in 2013. At this rate, and with no concessions, even Dr. Evans will recognize insolvency in 2013 - there will be no question, the District will not be able to fulfill it's AP (accounts payable) obligations.

ScrippsDad
ScrippsDad

And - the hammer really really really drops in 2013. At this rate, and with no concessions, even Dr. Evans will recognize insolvency in 2013 - there will be no question, the District will not be able to fulfill it's AP (accounts payable) obligations.

John de Beck
John de Beck subscriber

Psychologists should recognize the symptoms of being in denial! Evans has a PhD in psychology and should know about denial. Maybe that makes him an expert! To bad he hasn't a degree in business.....

deBeck
deBeck

Psychologists should recognize the symptoms of being in denial! Evans has a PhD in psychology and should know about denial. Maybe that makes him an expert! To bad he hasn't a degree in business.....

Don Wood
Don Wood subscriber

The current board of the school district won't declare the district bankrupt until after they have sold off as many school sites as they can to their real estate developer backers at big discounts. THEN they'll declare the district bankrupt. Developer have helped drive the district into the ground as part of a land grab. Follow the money. See with school board members got the most campaign contributions from developers who are angling to get their hands on school sites and bond money.

Don Wood
Don Wood

The current board of the school district won't declare the district bankrupt until after they have sold off as many school sites as they can to their real estate developer backers at big discounts. THEN they'll declare the district bankrupt. Developer have helped drive the district into the ground as part of a land grab. Follow the money. See with school board members got the most campaign contributions from developers who are angling to get their hands on school sites and bond money.

ScrippsDad
ScrippsDad subscriber

Ok - I'm not going to panic....... I trust the Board...... NOT!!!!!

ScrippsDad
ScrippsDad

Ok - I'm not going to panic....... I trust the Board...... NOT!!!!!