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Earlier this month, we surprised two San Diego Unified school board members with a couple of eye-popping charts that we produced in an effort to understand the district’s financial crisis.
The school board and district officials have been saying for months that the district has been repeatedly underfunded by the state and federal governments. But our analysis showed that while the district has, indeed, suffered significant cuts in the last few years, those cuts just offset an equally significant ramping up of education funding during the first half of the decade.
This chart shows how the district’s funding has been cut since the 2006-07 school year:
But look over a longer period and you see this:
The two charts, which show the district’s total revenues, adjusted for inflation, show us that the district gets about the same amount of money per student now as it did in 2001.
So, why is the district in so much trouble now? The superintendent declared earlier this year that the district may have to declare insolvency. And, given that the district has cut more than 2,100 full-time positions in the last few years, how can it still be spending as much money per student as it did 10 years ago?
The answer is undoubtedly complicated. I called Bernie Rhinerson, the district’s chief of staff, and school board Trustee Richard Barrera and confronted them with the numbers and the charts.
Both told me that our analysis was flawed. Merely adjusting the amount of revenue the district received for inflation wasn’t enough to tell the true story of the rising costs of running a school district, they said.
The main cost Rhinerson and Barrera urged me to consider was the ever-rising price of salaried employees. Healthcare costs in particular have risen exponentially, they said, and so has the cost of other benefits.
That presents a different argument: that it’s a cost thing, not just a revenue thing.
As it happened, my colleague Keegan Kyle had already done some very good analysis of exactly that issue. Kyle pored through the district’s budgets for the last few years and compiled data on how much it has been spending on salaries and benefits. Then he overlaid data on the number of full-time employees the district employs.
What he found was pretty startling.
Because the district employs about 15 percent fewer people than it did five years ago, it has significantly cut spending on salaries in that time. But it is actually spending more on employee benefits now than it was five years ago. Indeed, the district’s overall spending on employee benefits has increased about 13 percent since 2007 despite cutting so many jobs.
Once you factor in the number of employees, the exponential growth of the district’s benefit costs looks pretty stark.
Take a look at this chart:
The cost of benefits per employee has increased 32 percent since 2007 to about $24,000 annually. Now go back to the first graph and you’ll see that increase has happened over the same time period that the district’s funding has been cut.
It’s the combination of those cuts and this constant uptick in benefit costs that has had a big role in getting the district in such a bind.
So, the problem isn’t that the district has so much less money than it used to, but that the money it gets simply doesn’t go as far, when it comes to paying for employees, as it used to.
That’s a big distinction, however, and it should focus attention on the district’s spending, rather than the amount of money it brings in in funding. Over the coming weeks, we intend to take a close look at those benefit costs: Why have they risen so much? How do San Diego Unified employee’s benefits compare to other districts? And what could be done to stop the upward trend?
Rhinerson pointed out that under state law, state funding for education is supposed to have a built-in cost-of-living adjustment that increases funding every year to keep it in line with the ever-growing cost of employing people in California. The state hasn’t given a cost-of-living increase in years, Rhinerson said, which is a big reason why the district’s in so much trouble.
There’s one other element of the district’s finances that has caught my interest in the past few weeks: The huge amount of money San Diego Unified spends on special education.
Special education is a big part of the district’s budget. Children with special needs are, on a per-capita basis, much more expensive to educate on average than their nondisabled peers. And, nationwide, there’s been an upward trend in recent years in the number of children diagnosed with special needs like Autism and Attention Deficit Disorder.
But San Diego Unified has actually seen the number of kids with special needs in its classrooms drop significantly in the last few years. Consequently, I expected to see a concurrent drop in the amount the district spends on special education.
Not so.
The district’s special education spending has actually remained almost constant since 2007 at more or less $250 million. Today, despite serving about 1,500 fewer kids with special needs — a 9.4 percent drop — the district is still spending more on special education than it did in 2007.
So, let’s look at the district’s special education spending per student:
Special education spending per student has increased 14.3 percent since 2007. That’s a trend the district is more than aware of.
Earlier this year, the school board asked the district’s Special Education Department, in conjunction with the Finance Department, to go through the special education budget and figure out why costs are still so high. The board wanted to know if there was any way to cut costs in special education.
That internal audit is ongoing, and we’ll be waiting to see its results. We’d also like to find out why the district still spends as much on special education than it did five years ago. And we’ll be taking a look at how the district’s spending on special education compares to other districts and to charter schools that serve a similar proportion of children with special needs.
Stay tuned as we dig further into the district’s budget.
Will Carless is an investigative reporter at voiceofsandiego.org. You can reach him at will.carless@voiceofsandiego.org or 619.550.5670.
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