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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 was formerly the head of investigations at Voice of San Diego.

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