Thursday, Jan. 29, 2009 | San Diego Unified is weighing whether to nudge teachers, principals and vice principals to leave the school district by offering them a financial bonus to depart. The idea is meant to save money by replacing more expensive, veteran employees with younger, cheaper workers, or by not replacing the outgoing employees at all.
It is touted as a way to reduce staff without resorting to politically and emotionally toxic layoffs — a major selling point for a school board majority backed by the teachers union that has pledged to avoid layoffs — as San Diego Unified stares down a deficit estimated to top $33 million this school year and $63 million the next.
Such an incentive, nicknamed a golden handshake, was last offered to employees to weather a budget crisis six years ago. The bonuses were based on existing pay and employees chose whether to get them paid out over several years or a lifetime. Records show that educators who took the bonus typically received between $300 and $400 monthly for life or $1,000 monthly for five years. Principals and district managers with higher salaries received more.
When it was crafted San Diego Unified argued that it would save schools $7.7 million in five years, staving off layoffs and other painful cuts. It is debated how much it actually saved — or whether it saved any money at all.
The new idea is to offer the golden handshake only to teachers, principals and vice principals, according to Administrators Association Executive Director Jeannie Steeg, who recently learned about the plan from Superintendent Terry Grier. Two outside groups have analyzed the savings for the school board. Their findings were not immediately available Thursday morning and board members were reluctant to share numbers because the move was discussed in closed session as part of teachers union negotiations.
Board members are wary of pursuing the path unless a critical mass of employees signs up — a pivotal factor in whether or not it saves money. Teachers will only be offered the bonus if 633 or more of them sign up; at least 11 principals must sign up as well, said school board member Katherine Nakamura. Though the idea is being presented to unions and principals, no final decision has been made.
“It is a matter of a tipping point,” Nakamura said. “The numbers have to make sense.”
It is a solution prized by the teachers union as a gentler way to cut employees, and was raised two years ago by a joint task force of union and school district representatives as a way to boost longtime teacher earnings to the county median. The union pushed again for a golden handshake this year in bargaining sessions with the school district, arguing that the savings should go to salaries. There are conflicting accounts of whether the teachers also pushed for the bonus to be teachers only.
“It is a respectful way that we might have to reduce our workforce and right-size our staff,” said Chief Human Resources Officer Sam Wong. San Diego Unified has a higher ratio of teachers to students than the average California school district and than comparable districts such as Los Angeles and Long Beach, according to the California Department of Education.
Now San Diego Unified is considering the union offer as a way to help plug the budget hole. It is also seeking to include principals and vice principals but not classified employees such as bus drivers, custodians or secretaries, who reap less savings through a golden handshake because their veterans do not earn significantly more than their new employees.
“When the classified unions get wind of this they are not going to be too happy,” Steeg said.
Those employees were included during the last golden handshake in the interest of fairness — a choice that staffers and trustees believe may have whittled down the savings five years ago.
How much the golden handshake actually saved San Diego Unified last time is unclear and hotly debated. Budget staffers could not be reached immediately Thursday for comment; as of last July no such analysis had been completed.
Another factor that could shape savings is the phenomenon of rehiring employees who depart who are believed to have unique knowledge or skills; such employees have earned upwards of $1.8 million since the bonus was offered. Last year the school board was advised not to pursue a golden handshake by Rick Knott, a former finance director who himself took the last buyout and was later rehired by San Diego Unified as a consultant.
“You’re paying somebody to do something they were going to do anyway,” Knott said in July, explaining that golden handshakes are a temporary fix that are less effective in ongoing financial crises. “And they didn’t factor in costs for having to bring people back.”
The bonus is one item in a long menu of potential cuts and changes that the school board is considering to balance its books, including adding more lunch periods and closing small elementary schools. Discussions are continuing in a series of budget workshops scheduled over the next month.
Update: This story has been updated to reflect the fact that the teachers union is disputing others’ characterizations of their proposal.