School board member Scott Barnett on Monday released his plan for keeping San Diego Unified out of insolvency, hoping to cut employee pay and benefits and use a November 2012 tax proposal to restore some of that lost pay.
With the school board facing difficult, looming budget decisions, Barnett said his plan would stave off the most unpopular cuts, avoiding school closures, land sales and the draining of the district’s reserves. Teacher layoffs, and the resulting class-size inflation, could still occur if the state makes midyear cuts to education this winter, he said.
Without massive changes, San Diego Unified will fall into insolvency, Barnett warned at a press conference at district headquarters. That would saddle city schools with worse problems long into the future, he said.
“We could either be facing a disaster next year or insolvency, those are our choices,” Barnett said. “The decisions that this board makes or doesn’t make in the next few weeks could affect not just the upcoming year but potentially decades into the future.”
Barnett’s warnings of insolvency echo those of Superintendent Bill Kowba and board President Richard Barrera, who recently began saying the district was headed for a state takeover unless Sacramento made drastic changes to its education funding or raised taxes.
Unlike Kowba and Barrera, however, Barnett isn’t looking to the state for help. He wants the district to go after pay and benefit concessions from its workers, a cost that takes up more than 90 percent of the district’s day-to-day budget.
The state has decimated school funding in recent years, providing districts with 15 percent less money than it did a few years ago, according to School Services of California, a financial consultancy. The San Diego Unified school board has potentially compounded the state’s financial problems, however, by making decisions with the hope that the state’s economic rebound would be more promising than it has been.
Barnett’s plan would essentially undo one of those decisions: the three-year contract it struck in 2010 that shortened the school year by five days and lowered teacher pay in the first two years in exchange for a series of three raises in the final year, 2012-2013. And Barnett’s plan is built on the hope that voters will backfill a further 10 percent reduction in worker pay by approving a tax increase next November.
His proposal has four main elements:
• Restore the five days of school lost in the most recent contract with teachers, an added cost of $17 million, and maintain the regular pay increases employees get for their experience at the district. Both of these would happen under the current contract regardless.
• Eliminate the proposed across-the-board pay increases that go into effect next year, saving $21 million that year, $22 million the next and $43 million a year after that. He would also restructure health care to save $12 million, charging a premium for employees who chose providers beyond a free plan.
• Cut pay 10 percent beginning July 1, saving $60 million a year. There would be a sliding scale that would cut a larger percent for those making more than $150,000 and a smaller amount for those on the bottom end of the pay scale.
• Put a $50-per-parcel tax before voters to raise $60 million a year and restore the employee pay cuts.
The most striking of the four points, and likely the most controversial, is the proposed salary cut.
While the school board has previously tried to renegotiate the raises in the final year of the contract, it hasn’t sought to reduce pay in the current environment. Unions don’t have to come back to the table to renegotiate under the current contract and have already rebuffed the board’s efforts to talk.
Barnett said a decision needs to be made soon — any agreement to cut salaries would have to be made by the end of the calendar year. That means Barnett will have to first convince his fellow board members, then convince unions to come to the table more than a year early, all within the next two months.
The fiscal reality at the district is stark.
The minimum deficit it faces next year is $60 million. That rises to almost $115 million if the state makes the midyear cuts, which are looking more and more likely each month as taxes continue to come in below projections. The district has vague plans for dealing with the $60 million deficit, such as selling land and closing schools.
Even the school closures look to be off the table after outcry from parents and teachers, highlighting the treacherous road ahead for the school board. The district has no plan to deal with the larger hole.
Barnett’s announcement was met with skepticism from a fellow board member and scorn from the teachers union.
The San Diego Education Association pushed back against the idea that the school district’s finances are in immediate need of repair. “[B]ad news is in no way a foregone conclusion,” the union said in a release.
“Barnett is yet again suggesting the decimation of the teaching profession in San Diego to fill a budget hole that no one will know exists until January of 2012 at the soonest,” the statement reads.
Barnett said the unions must either come to the table or the district will go bust. If that happened, the state would be forced to loan the district money in exchange for relinquishing local control. The superintendent would be fired; the school board would become an advisory council.
“If they want the district to go under, then they can say definitely they won’t talk, which has been their stance up until now,” he said.
Barnett has already placed his plan on the agenda for Tuesday night’s meeting. He’ll need the support of at least two of his four colleagues to move forward.
Trustee John Lee Evans held a press conference immediately after Barnett stepped away from the television cameras.
Evans called for the board to take a measured, calm and incremental approach to solving the district’s budget woes. He said the district shouldn’t solve the crisis by asking teachers to take pay cuts.
“Our teachers and staff are underpaid,” Evans said. “What we need to talk about is shared sacrifice. Yes, concessions will have to be made, but we can balance the budget without putting all of the concessions on the backs of teachers and our employees.”
However, Evans, who was elected with support from labor unions, said he did agree with canceling or at least delaying the pay raises he voted for last year.
While he said teachers should not be asked to make further concessions, Evans also said that midyear cuts “would be impossible to manage.”
He said that if the midyear cuts happen, the board would consider all possible alternatives to avoid going insolvent. He didn’t define whether those alternatives include asking teachers to take pay cuts.
As for the parcel tax increase, the school district tried that route and failed just one year ago. Proposition J, a similar proposal to raise money for schools, needed two-thirds support to pass; it barely got 50 percent. But talk of schools’ possible insolvency hadn’t grabbed popular attention, either.
Were it to get to the ballot, Barnett’s parcel tax would essentially be a referendum for the public on teacher pay. His plan proposes that all the funds from a tax would be used to raise teacher salaries to the level they were at before being cut under his plan.
The teachers union heaped scorn on that element of the plan in its statement, saying that tying teacher compensation to tax increases wasn’t viable.
Barrera, the school board president, couldn’t be reached for comment on Barnett’s plan. Trustee Shelia Jackson said she would save her comments for Tuesday night’s school board meeting.
“I’m not going to hold a press conference, I’ll do it from the dais, where it’s supposed to be done,” she said.
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