File photo by Sam Hodgson
Last week, with much fanfare, the San Diego Unified School District announced a labor deal with the local teachers union. If ratified, it will allow almost all of the 1,534 educators who have been laid off to return to classrooms next year.
The tentative agreement puts off a series of promised pay raises and extends five unpaid furlough days educators have been taking for the last two years. Combined, those concessions save the district about $24 million each year for the next two years.
Although the district is saving $24 million a year as a result of the concessions, its deficits for the next two years aren’t shrinking as a result.
A few weeks ago, before this deal was brokered, the district projected its deficit for 2013-14 at about $98 million. At a late-night board meeting on Friday, district staff revised that figure — to $92 million. Despite the labor deal, the deficit two years from now is still pretty much the same.
What gives? Why is the deficit still so large in 2013-14?
The answer is fairly simple: The deficit the district was projecting before the deal was made is still there — even with the deal in place.
That’s because everything the district “saves” from not paying the raises or rolling back the furloughs will be spent bringing back classroom teachers. The money’s not really being saved, it’s just being spent on bringing teachers back, instead of on raises and rolling back furloughs.
So what makes up that deficit?
Trustee Richard Barrera and I spent a lot of time on the phone this weekend figuring this out. Here’s how he explained the main factors that contribute to the projected deficit in 2013-14:
• Every year, the district’s staffing costs increase because of automatic built-in pay raises. The district’s healthcare costs also increase every year, as do things like utility bills and gas prices for district vehicles. All-in, these increases account for about $30 million of the $92 million projected deficit in 2013-14.
• The district will end this year with money in its accounts because it spent less than the district’s accountants thought it would. This year, the district projects it will carry over about $26 million into 2012-13. But the district projects it will burn through that money next year, leaving it with no savings to carry over into 2013-14. That lack of savings to carry over accounts for about $26 million of the $92 million projected deficit.
• Next year, the district also plans to raise about $21 million by selling under-utilized properties. That’s a one-time boost that won’t be available in 2013-14, unless the district decides to sell more property.
• While the district has made a deal with the teachers union, it hasn’t yet come to an agreement with some other unions that represent district workers. The Administrators Association, for example, hasn’t agreed to concessions. Until they do, the district has to factor the cost of paying those employees their promised pay increases and rolling back their furlough days. That makes up most of the remaining $15 million of the $92 million deficit.
The district will obviously have to come up with a solution for the deficit it’s facing in 2013-14. And it will have to start figuring out how to do that pretty soon — in the next few months.
While it’s possible that the district could once again threaten layoffs in order to close that deficit, this will likely depend on whether voters pass one or both of the tax measures on November’s ballot.
Gov. Jerry Brown has pledged to use the earnings from his new tax measure to eliminate the state’s budget deficit next year. If the tax passes and he fulfills his pledge and pays off the deficit, the state will then have significantly more revenue free to spend in the following year, 2013-14.
By law, the state has to spend a proportion of that extra money on education. So, school districts like San Diego Unified would almost certainly see their funding increase in 2013-14.
So, if the tax passes, the district’s budget deficit that year could end up being a lot less than the district is currently projecting. The district’s initial prediction is that it could receive as much as $30 million to $50 million in extra funds in 2013-14 if the governor’s tax measure passes.
That means San Diego’s teachers likely wouldn’t face another year of layoffs.
Of course, if the taxes don’t pass, we’ll be playing the layoff game once again.
Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at firstname.lastname@example.org or 619.550.5670.
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