Notes from the budget committee

Tonight the Board met as a Committee of the Whole to discuss the Superintendent’s proposed Budget Deficit Action Plan. The Superintendent is requesting that the Board approve his proposed strategy for closing the district’s looming $113 million budget deficit for the coming two years (2010-11 and 2011-12).  I’ve written earlier about his proposals, and tonight was the opportunity for the Board to discuss those proposals in further detail with the staff.

We also had an opportunity to hear from the Parent Advisory Council and PPS about the budget forums they hosted with community members earlier this month. There were three forums plus a workshop at the Site Council Summit in February, attended by a total of about 100 people. Their comments were faithfully recorded in detail and summarized in a report the groups delivered tonight. I very much appreciate the work, and there were some good suggestions and questions in the report, but overall after hearing it I felt we still have a long way to go before people get to a place where they feel they really understand the issues we’re facing. 

There were a number of members of the public who came to speak: members of Coleman Advocates stressed the importance of continuing to focus on closing the achievement gap; parents and community members from Dianne Feinstein and Monroe voiced concerns about the impact proposed cuts will have on their programs;  members of the San Francisco Organizing Project presented an alternative budget with 20% cuts across the board to most central office functions; and arts advocates spoke against the proposal to “flex” the Art and Music Block Grant — a $1.4 million reduction over two years (we are fortunate to be able to maintain a protected $4.8 million stream of arts funding through the Public Education Enrichment Fund, so this proposal would not reduce arts funding completely).

New ideas discussed by the Board tonight included revisiting proposed cuts to transportation — which at the moment would primarily affect students who are being bused to Galileo, Mission and O’Connell high schools.  This idea came out of the budget committee back in December 2008,  when the committee opted not to consider the more painful options of cutting service to elementary schools or changing bell times. However, 15 months later we are in a whole new ball game, so Commissioners indicated they might be willing to consider these tougher cuts if it kept cuts away from the classroom.  We also asked whether schools could be given more flexibility with their budgets than they have now, so that one school could opt to raise class sizes and keep a Learning Support Professional (LSP, generally a counselor or nurse) while another school might opt to consolidate its LSP position to keep class sizes low. This would, of course, assume that we are eventually able to negotiate a class size increase in order for schools to even have the option of raising their class sizes higher than the budgeted 26 (right now K classrooms have been enrolled to 22 but schools have been budgeted for K-3 class sizes of about 26).

Anyway, aside from the inevitable “don’t cut this essential program!” arguments, the chief issue before the Board is whether or not to endorse the Superintendent’s somewhat aggressive stance on moving forward with proposed cuts, even though we don’t have to adopt a budget until the end of June. Mr. Garcia’s chief argument is that there’s very little point in waiting, since we know we will have to make severe cuts, and prolonging the agony simply keeps schools and staff members twisting in the wind, wondering about what their site budgets will be and whether they will have a job next year.  In addition, he appears increasingly concerned about the district’s bond rating, which will be reviewed by the rating agencies next month. If, he argues, the rating agencies don’t see a plan to deal with the looming deficit, they will downgrade our rating and make it more expensive for us to sell bonds (which makes our many ongoing facilities projects cost more). In addition, the district on occasion sells short term debt to strengthen our cash flow between payments from the state. A downgraded bond rating would make that harder to do.

The argument on the other side is that the proposals haven’t been fully vetted by the Board and the community, and that more time is needed for everyone to digest and gain full understanding of what is being proposed.

The backdrop to all of this are intense labor negotiations happening behind closed doors with members of United Educators of San Francisco and members of the administration. The Superintendent’s plan asks for more than $44 million from our labor partners, and this is not an easy request for them to swallow.

The plan comes back to the full board for second reading and a final vote on March 23.

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9 responses to “Notes from the budget committee

  1. I’ve been thinking about this for awhile, and I am wondering if it is in the District’s best interest to be engaging in short-term debt financing at all.

    Is any of that debt financing ever rolled over? And how occasional is “occasional”? Short-term debt financing responds to more than just the credit rating; it also is affected by perception. Inability to roll short-term debt has doomed more than a few companies – Bear Stearns being perhaps the most recent example. Some analysts still argue that Bear Stearns’ financial state was better than the debt market assumed – until they couldn’t get a market going for that debt.

    Certainly the District has considered these factors, but given the state of California’s fiscal crisis I don’t think that SFUSD should be selling debt into the short-term market. I think this also points to the importance of timely state budgets.

  2. We’re talking about budgeting for the next two years, so it’s hard to see what “cash bleeds” can be stemmed now, and that are so deep that a fast, obscured process is better than an open one. After all, SFUSD chose not to make major cuts last year knowing that the budget picture going forward was bad and likely to get worse.

    The Superintendent has been pushing an urgent process since January. Repeated requests from the District’s unions, schools, parents, and other stakeholders for specific information, however, have not been treated with urgency. And when the information is made available, it is often disingenuous (for instance, budget projections from certain Central departments), in flux (layoff projections, timing of notices), and apparently out of alignment with the District’s strategic plan (mass class size increases and layoffs that inequitably impact high-needs schools are not going to close the opportunity gap).

    Moreover, SFUSD is either unwilling or unable to answer the question stakeholders keep asking: for a budget proposal that explains what is being kept (and why) and what is being cut, and for a budget proposal that has clearly stated objectives for meeting the recommendations of the strategic plan. Placing a statement of the plan’s objectives into a budget presentation is empty platitudes. Stakeholders have a right to understand how each major decision is aligned with that plan.

    In short, I believe that the District’s urgency is far less important than clarity, and the onus for the latter is on the District.

  3. “Community budget meetings, Board agendas, information given to school sites, etc. have NOT provided answers to the questions schools and families keep asking.”

    And the longer you draw out the process, the more cash bleed there is. If you’re going to kill a program or an FTE position, dragging out the process by three months of consultation and community meetings, etc., increases the number of FTEs you have to cut by 12%. I’d rather they hack now and apologize later, than have a lot of process and deeper cuts.

  4. Rachel wrote: This would, of course, assume that we are eventually able to negotiate a class size increase in order for schools to even have the option of raising their class sizes higher than the budgeted 26 (right now K classrooms have been enrolled to 22 but schools have been budgeted for K-3 class sizes of about 26).

    26 kids per kindergarten class? With one teacher??Is this really what things have come to? This is absolute insanity. Do we think our teachers are magicians?

  5. You’re right, it’s the class size increases that will cost the district $8 million, not –of course– reductions.

    The class size increases would impact all elementary schools in the district, not just ours.

  6. Abby wrote: “The class size reductions will only save the district $8 million over two years ”

    I’m confused, don’t you mean class size INCREASES?

    Also, isn’t: “voicing concern about the impact of budget cuts on our programs” the same as ” not wanting the District to raise class sizes or layoff teachers”? Raising class sizes and laying off teachers would be the impact budget cuts would have at your school.

  7. Rachel, I just wanted to clarify that the Feinstein parents were not voicing concern about the impact of budget cuts on our programs. They were voicing the strong and nearly unanimous opinion by families at our school that we do not want the District to raise class sizes or layoff teachers.

    The class size reductions will only save the district $8 million over two years (out of the $113 million budget deficit). We feel that maintaining the current class sizes is such a high priority that the District could easily find this money (well, maybe not easily, but there are many possibilities for finding this money elsewhere…) somewhere else. There are plenty of other cuts to programs and other items that would amount to more than $8 million and not impact our children or our schools the way that class size increases would, or that loosing (in our school’s case) half of the teachers at our school would.

    To reduce this concern to concerns about school programs is misleading, which is why I wanted to clarify!

  8. “the chief issue before the Board is whether or not to endorse the Superintendent’s somewhat aggressive stance on moving forward with proposed cuts”

    I’ll endorse Garcia’s stance . Waiting to make the cuts means more severe cuts later, as well as the credit rating issues he mentioned. I don’t think more community consultation is going to gain you much more in the sense of priorities, and the political heat would eventually be the same or worse.

    Make the hard decisions now.

  9. I think it’s worth noting that the Superintendent has always been agonizing about the effects of not immediately adopting all proposals: first it was the threat of state takeover, now it’s the threat of a lowered bond rating. These are undoubtedly difficult and important fiscal issues, but they do not lessen the need of the District to make cuts the community understands and that are aligned with its strategic plan.

    Also, it should be asked if the District is proving itself to be a good-faith negotiating partner. Have stakeholders gotten the information that SFUSD has repeatedly committed to sharing? Community budget meetings, Board agendas, information given to school sites, etc. have NOT provided answers to the questions schools and families keep asking.

    Has SFUSD met its stated commitments to its staff? Not really: paraeducator notices have not yet been sent, so the argument that an extra month’s notice to paraprofessionals is a reason to approve those layoffs has been negated. Did the District send the number of layoff notices to classroom staff to which they committed in their 1 March presentation? No, they sent more (502 vs. 645).

    Moreover, while it’s true that the District’s budget situation is consistently changing, what IS different this year is the indication that for once, the May revise MIGHT NOT be worse than the current scenario. Among other factors, the Governor’s budget proposal requires a federal waiver, and as yet the waiver has not been granted (and in fact, the state is being required to provide more information based on the shenanigans the Governor proposes with deferred funding and tax/fee reversals).