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When San Diego Unified schools drew up a plan to slash $120 million from their budget, they said they weren’t banking on the state to extend taxes to help them. Gov. Jerry Brown had included tax extensions as a key part of a plan to help spare education from deeper cuts.
But then on Tuesday, when Brown broke off talks about putting tax extensions on the June ballot, school officials were alarmed. Schools now say they could suffer much deeper cuts than they had planned.
What happened? If schools weren’t counting on the tax extensions a week ago, what has them so worried now? The problem for schools isn’t just taxes or no taxes. It’s what the legislature decides to do without them.
Let’s walk through this step by step.
Financial experts were leery of counting on tax extensions, so school districts built their draft budgets imagining what would happen without them.
They assumed that schools would still get their minimum share of the state funding required by a California law. That would still mean a financial hit of $2.1 billion — or about $349 less per student.
The San Diego County Office of Education, which acts as the financial overseer for local school districts, recommended that schools base their budget plans on that $349 per student cut. So did School Services of California, an advisory group. That came out to about $120 million in estimated cuts for San Diego Unified.
“We said, it’s definitely not the worst-case scenario, but it would be prudent to at least plan for this,” said Lora Duzyk, assistant superintendent of business services for the County Office of Education.
But Brown didn’t actually spell out what would happen if the tax extensions weren’t approved. While lawmakers argued over the extensions, the state legislative analyst put out its own projection, estimating education would actually need to be cut by $4 billion or $5 billion if the taxes failed.
Budget analysts say that comes out to more than $800 in cuts per child. But cuts that deep would violate the law that guarantees minimum school funding. Lawmakers would have to vote to suspend the law. School districts are bracing to see if that will actually happen. Brown himself has hinted at it, but nothing is certain.
“The governor is playing his cards close to the vest,” said Ron Bennett, CEO of School Services of California, a company that advises school districts on finances. “He’s obviously thinking about other things. But he’s not talking.”
San Diego Unified finance chief Ron Little said the situation is so uncertain that it’s hard to say how high the deficit could climb if the minimum funding rules are suspended. (The Union-Tribune quoted a minimum cut of at least $50 million more than the school district was planning on.) Finance staffers are working out those numbers now. Duzyk said her office is still waiting for a concrete plan from the governor or a budget committee to start making plans.
Why didn’t the school districts plan for cuts that deep in the first place? “To most of us in the school community, including many — but not all — consultants who advise school districts, it was quite unfathomable that the State could consider taking even more from K-12 given the levels of reductions already being considered,” Little wrote in an email.
If the cuts really end up being that bad, Duzyk said, the state would have to loosen the rules on schools, letting them shorten the school year dramatically, ramp up class sizes still higher or use funding now earmarked for specific purposes. Some school districts might also eye a quirk in the law that could let school districts warn teachers as late as August that their jobs could be cut.
Yet Bennett says they aren’t panicking, despite numbers that he calls “breathtaking.” He doesn’t think Brown and lawmakers will really cut schools that deeply. If they do, Bennett said, it would backfire.
“Maybe 100, 150 school districts would become candidates for state loans,” he said. “It wouldn’t take that many loans to exceed the amount they thought they saved. We don’t think the state will force that many school districts to go bankrupt.”