How Prop. 30 Cash Could End Up Costing SD Unified

How Prop. 30 Cash Could End Up Costing SD Unified

File photo by Sam Hodgson

Gov. Jerry Brown pitched Proposition 30 as a measure to save California schools from an unending fiscal crisis. But in San Diego, most of the money will initially go to pay raises for teachers and administrators.

 

Proposition 30 was meant to rescue California’s public education funding crisis.

But at the state’s second-largest school district, San Diego Unified, the influx of cash from the new statewide sales and income tax could actually cost the district money in the near future.

About 61 percent of any new funding the district receives over the next couple of years will be immediately swallowed up by contracts signed with employee unions last year. Most of that money will go to teachers, who agreed last summer to forgo a series of raises they were promised in 2010 and to continue taking five unpaid days off annually to help the district get through the year.

In exchange for bailing the district out, the school board agreed to use 57 percent of any future increases in revenue to cancel teacher furloughs and give teachers their raises. It later agreed to pay the far smaller administrators union an additional 4 percent of any new money as well.

That means only about 39 percent of any new money Sacramento sends San Diego Unified from Prop. 30 will actually be available to help solve the district’s ongoing budget deficit. The district is still calculating exactly how much it’s likely to get, but officials have pegged their 39 percent share of the new revenue at about $10 million for the 2013-14 school year.

While $10 million is substantial, it would only take care of about one-eighth of the district’s projected $86 million deficit next year.

And here’s the rub.

The 61 percent of the new cash that goes straight to teachers and administrators will also have a significant effect on the district’s ongoing operating expenditures.

Giving teachers and administrators raises and canceling furloughs are not one-off costs. Once an employee’s salary has been increased, the district has to pay that employee more every year ad infinitum (or at least until the district can renegotiate the raise with the union). While children get the benefit of more school days, five additional days of pay for all teachers will cost the district about $20 million a year.

We don’t know exactly how much those raises and eliminating furlough days will cost the district in total. San Diego Unified is still trying to figure those numbers out and won’t be releasing them until later this month.

But last year, when we examined this issue, district officials said the raises and the elimination of the furloughs would cost the district about $72 million a year going forward.

The district’s operating costs won’t increase by much in the 2013-14 school year because the raises and the elimination of furlough days will be incorporated according to a set formula laid out in the contract with the teachers union. As new money comes in, furloughs are canceled and pay raises are awarded.

Still, district officials estimate that at least one of the three planned pay increases will go into effect this year. And they think there will be enough new money to pay for the remaining pay increases in 2014-15.

So, by the end of the 2014-15 school year, all other things being equal, the district will have given all the raises and canceled all the unpaid days off, actions that will increase its operating expenses by about $72 million a year.

That means the district will need to receive at least $72 million in additional revenue from Prop. 30 each year, just to pay for the raises it promised back in 2010 and to bring the school year back to its full 180-day calendar.

Prop. 30 may well deliver significantly more than that in future years.

In a presentation to the school board on Jan. 22, the district’s new CFO Stan Dobbs estimated the district could receive $128.7 million extra from the state by the 2015-16 school year.

Estimating, very roughly, how much new money the district could apply toward its deficit by 2015-16 is fairly simple.

Subtract the $72 million cost of new raises and canceled furloughs from that $128.7 million and you’re left with $56.7 million.

Now, a little context for that number.

Next year, the district’s projected deficit is about $86 million. That’s before any pay raises or eliminating the furlough days. It’s just the “structural” deficit the district is living with year-in, year-out because it spends more money each year than it gets in revenue. (Last year, the deficit was even bigger — about $120 million).

To solve the immediate problem, the district plans to use a one-time solution: selling off about $50 million worth of real estate. The school board is also taking some longer-term action to deal with the deficit.

This year, it’s introducing a concept called the “attrition-based model.” This means that as teachers quit or retire, the district won’t hire new teachers to take their place. District officials estimate that by not replacing teachers, they can save about $30 million a year.

If the district sticks to that course, then, it could be in reasonable shape by the 2015-16 school year. If it can reduce the number of teachers on its payroll, it may have enough coming in from Prop. 30 to pay for all the raises it’s about to give teachers and administrators.

But those savings come from not replacing departed teachers. That means class sizes increase. And merely having enough money to stay afloat three years from now is a far cry from the “era of investment” and stability that the school board has been promising.

We will learn more when the district releases its numbers later this month.

The relevant issues at that point will be:

• How much the new Prop. 30 funds will add to the district’s salary costs;

• Whether San Diego Unified’s influx of new cash will be sufficient to balance out those new costs and deal with the district’s structural deficit; and

• Whether there will be anything left over to spend in classrooms.

Will Carless is an investigative reporter at Voice of San Diego 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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31 comments
Kelly Donivan
Kelly Donivan subscriber

Well...the Catholic schools in the San Diego diocese require a teaching credential. As for teacher training...it is not very good in California. What does a credential really prove anyway? That one is willing to jump through the hoops that the state of CA makes one take and most involve lots of money. I am more interested in the teacher having subject matter mastery. I have met many public school teachers with credentials and little else.

Genxer65
Genxer65

Well...the Catholic schools in the San Diego diocese require a teaching credential. As for teacher training...it is not very good in California. What does a credential really prove anyway? That one is willing to jump through the hoops that the state of CA makes one take and most involve lots of money. I am more interested in the teacher having subject matter mastery. I have met many public school teachers with credentials and little else.

bigdprender
bigdprender subscriber

It's been said that private schools’ "best qualities cannot be captured by a number...and that teachers understand that a student is a whole human being whose value is not even tied to the grade on a report card". Whoever said that clearly needs to be axed for underestimating the power and value of national rankings. I bet they think small class sizes matter too!

bigdprender
bigdprender

It's been said that private schools’ "best qualities cannot be captured by a number...and that teachers understand that a student is a whole human being whose value is not even tied to the grade on a report card". Whoever said that clearly needs to be axed for underestimating the power and value of national rankings. I bet they think small class sizes matter too!

Jim Jones
Jim Jones subscriber

Sure, it's shown in how well our schools are ranked nationally... Love that 48th place!

Jim Jones
Jim Jones

Sure, it's shown in how well our schools are ranked nationally... Love that 48th place!

bigdprender
bigdprender subscriber

The blowhard campaign to discredit teachers of all stripes will rage on until every last benefit of a worthy career is taken away. Unions enable teachers to focus on what matters, allowing students opportunities to grow. But if nothing else, unions are needed to keep up with the Jones'.

bigdprender
bigdprender

The blowhard campaign to discredit teachers of all stripes will rage on until every last benefit of a worthy career is taken away. Unions enable teachers to focus on what matters, allowing students opportunities to grow. But if nothing else, unions are needed to keep up with the Jones'.

Jim Jones
Jim Jones subscriber

Our school are as miserable as our teachers are greedy.

Jim Jones
Jim Jones

Our school are as miserable as our teachers are greedy.

Emilio Torres
Emilio Torres subscriber

Having a teaching credential is indicative of very little in terms of being a good teacher or bringing value to education. True, there are some excellent credentialing programs, but there are many, many terrible ones, where the only hurdles are procedural.

Emilio
Emilio

Having a teaching credential is indicative of very little in terms of being a good teacher or bringing value to education. True, there are some excellent credentialing programs, but there are many, many terrible ones, where the only hurdles are procedural.

Jake Resch
Jake Resch subscriber

Private school teachers are not required to have a teaching credential.

Dawg53
Dawg53

Private school teachers are not required to have a teaching credential.

Frances O'Neill Zimmerman
Frances O'Neill Zimmerman

It's too late now, but this is why Molly Munger's initiative was better than Governor Brown's Prop 30. Munger's bill disallowed use of tax money raised for salaries and was strictly targeted to K-12 classroom improvement. The Governor needed a bill whose provisions would benefit the teachers whose huge and powerful union, CTA, supported both him and his measure. So now we shall see how it pans out.

Jim Jones
Jim Jones subscriber

It's easy to give up something when you are already massively overpaid and overcompensated. Public teachers, even without a raise, are around 30% higher paid than their private school counterparts because they pretty much own both sides of the negotiating table. The "victim" act is wearing pretty slim.

Jim Jones
Jim Jones

It's easy to give up something when you are already massively overpaid and overcompensated. Public teachers, even without a raise, are around 30% higher paid than their private school counterparts because they pretty much own both sides of the negotiating table. The "victim" act is wearing pretty slim.

Amie Wilson
Amie Wilson subscriber

Teachers have advanced degrees and years of experience and expertise. They deserve to make a living wage to support their own families. Often they have their own children in the same public schools and are not out to "punish" parents.

awilson
awilson

Teachers have advanced degrees and years of experience and expertise. They deserve to make a living wage to support their own families. Often they have their own children in the same public schools and are not out to "punish" parents.

Kay McElrath
Kay McElrath subscribermember

Over the next 3-7 years, it is inevitable that school employers will be asked to substantially increase (i.e. double their current 8.25% of payroll cost) their contributions to the pension fund. It is delusional to think that the state will pick up that tab and hold the school employers completely harmless. Since contributions to the pension fund are being made to benefit the same employees who are seeking raises, it is important that commitments for salary increases be offset by any additional obligations directed to the pension cost. I haven't heard a peep from SDUSD about this and nothing in their financial forecasts suggest that they've given it the priority it deserves.

OnceRemoved
OnceRemoved

Over the next 3-7 years, it is inevitable that school employers will be asked to substantially increase (i.e. double their current 8.25% of payroll cost) their contributions to the pension fund. It is delusional to think that the state will pick up that tab and hold the school employers completely harmless. Since contributions to the pension fund are being made to benefit the same employees who are seeking raises, it is important that commitments for salary increases be offset by any additional obligations directed to the pension cost. I haven't heard a peep from SDUSD about this and nothing in their financial forecasts suggest that they've given it the priority it deserves.

Stuart Morse
Stuart Morse subscriber

Uh, the last negotiation when the teachers gave up promised raises and agreed to give up 5 days worth of salary...gotta pay closer attention....

smorse
smorse

Uh, the last negotiation when the teachers gave up promised raises and agreed to give up 5 days worth of salary...gotta pay closer attention....

Jim Dodd
Jim Dodd subscriber

Watching from the sidelines I observed the teachers make large concessions to the District, and then not get what they swapped for. I wondered when the crows would come home, this is part of it.

JimDodd
JimDodd

Watching from the sidelines I observed the teachers make large concessions to the District, and then not get what they swapped for. I wondered when the crows would come home, this is part of it.

matt Spathas
matt Spathas subscriber

@mgland - you nailed it - no one is talking about the $65 billion underfunded California Teachers Pension (CALSTRS) - they have already approached SDUSD about the need to increase contributions - district has not solved structural deficit of $50MM to $85MM - selling out next generation (our kids) by selling property to cover payroll. Reckless fiscal management.

msentre
msentre

@mgland - you nailed it - no one is talking about the $65 billion underfunded California Teachers Pension (CALSTRS) - they have already approached SDUSD about the need to increase contributions - district has not solved structural deficit of $50MM to $85MM - selling out next generation (our kids) by selling property to cover payroll. Reckless fiscal management.

Mark Giffin
Mark Giffin subscribermember

CALSTRS funding formula and the fact they are 65 billion underfunded is going to bite school district budgets even more.

mgland
mgland

CALSTRS funding formula and the fact they are 65 billion underfunded is going to bite school district budgets even more.

Michael Robertson
Michael Robertson subscribermember

Are there any examples of union contracts where teachers or administrators agreed to pay cuts? It's hard to imagine that happening with the union friendly board so I'm not sure that's a plausible path. They seem inclined to use fake fire teachers and threaten to close schools or balloon classroom sizes to punish parents.

mp3michael
mp3michael

Are there any examples of union contracts where teachers or administrators agreed to pay cuts? It's hard to imagine that happening with the union friendly board so I'm not sure that's a plausible path. They seem inclined to use fake fire teachers and threaten to close schools or balloon classroom sizes to punish parents.