Pink slips, red ink and “gray area” math

On tonight’s Board agenda is a resolution to issue preliminary layoff notices to over 500 certificated employees – an action that no one wants to take but is required based on the budget outlook. State law requires us to notify teachers and administrators by March 15 if there is a possibility that they will be laid off for the next academic year.

We may be able to rescind those pink slips if we are granted a draw from the City’s Rainy Day Fund — ideally before May 15, when we are required to issue formal layoff notices to certificated employees. The May 15 deadline is crucial, because once a teacher gets a formal layoff notice, he or she starts looking for another job and  we run a real risk of losing that person–even if we find the money to rehire them later.

At yesterday’s press conference on the layoffs, there was some confusion about the Superintendent’s statement that the state’s budget compromise (which covers the remainder of this fiscal year and all of 2009-10) leaves us to absorb $51 million in cuts — $22 million for 2008-09 and $29 million for 2009-10. How can we cut $22 million of money that is already committed and partially spent for this year? The answer is that we planned ahead during last year and increased our reserves significantly; in addition we asked schools not to spend all of the money in their budgets until we knew how much the state would ask for in mid-year cuts. Now that we know that the state’s mid-year cuts amount to a $22 million reduction for SFUSD, we can pull back some of that unspent money and use it to backfill against these cuts.

For 2009-10, here we go again: the state is proposing $29 million in cuts. Though I haven’t seen detailed numbers yet, budget staff are telling us that absorbing these cuts would mean reductions in 506 certificated staff members — hence tonight’s vote to issue preliminary layoff notices. The best hope to rescind most of these layoffs is the City’s Rainy Day Fund, which came to the rescue last year.

Yesterday, five members of the Board of Supervisors stood with us in the Board room and pledged their support to the schools during this crisis. Today, a number of them stood with the Mayor in Room 200 and said they would support another Rainy Day Fund release to the schools. That’s good news, except that the math that will be used to determine the size of our draw falls into a “gray area.”

In general, the schools are allowed to draw up to 25 percent of the Rainy Day Fund in any given year where we are facing significant revenue cuts and staff reductions. Last year, we were ultimately issued $19.7 million from the fund, which allowed us to save the jobs of 535 people who had received preliminary layoff notices.

This year, news reports put the current balance of the fund at $92 million (which is less than the $98 million figure circulated earlier this month).  That means we should be eligibile for about $23 million, right? Not so fast — the City’s finances are also in desperate straits, which entitles the Mayor and the Board of Supervisors to draw 50 percent of the fund. The question is – should SFUSD’s 25 percent be calculated before or after the City’s draw?

The answer to this question has serious implications for our teachers — if we are allowed to take 25 percent of $92 million ($23 million), we can save most if not all of the 506 jobs currently at risk. But if we are given 25 percent of 50 percent of $92 million (which comes out to $11.5 million, or 12.5 percent of the fund’s current balance), many of those people will lose their jobs, our classrooms will get more crowded, and our kids, ultimately, will pay the price.

Whoever said math wasn’t devastatingly relevant?