If you haven’t noticed rising tensions between the district and its main union, United Educators of San Francisco (UESF), you haven’t been paying attention. The school district and UESF are again in contract negotiations, as the two-year agreement crafted in June 2010 expires June 30, 2012. In June 2010, the district was facing a $113 million deficit over two years (201o-11 and 2011-12), and UESF members and other employees gave furlough (unpaid) days and other concessions to close that gap.
Those concessions expire on June 30, but the budget crisis is not over, based on an analysis by Deputy Superintendent Myong Leigh at tonight’s meeting. California school districts are required to submit board-approved three-year budgets by June 30 of each year, and the SFUSD figures–based on the passage of tax measures on this November’s ballot–appear in the chart below (note that the figures only represent the Unrestricted General Fund — the largest and least restricted pot of money the district spends). There are additional monies — facilities bond funds, special education funding from the state and Federal government, student nutrition reimbursement and other revenues– that are not included here. Many of these programs (special education and student nutrition are major examples) also require a contribution from the Unrestricted General Fund to continue a minimum level of service. So the figures below do not include revenues from restricted programs but do include any contributions of unrestricted funds that are required to keep programs funded by restricted funds completely solvent.
You might also have heard of two state revenue initiatives just concluding the signature gathering phase to qualify for the ballot — the Governor has one, called the “Schools and Local Public Safety Protection Act,” and the California PTA and civil rights attorney Molly Munger have another, called “Our Children Our Future.” Each claim to raise money for education, but it is beyond the scope of this post to weigh the benefits and drawbacks of each. Anyway, districts are being encouraged to budget as if the Governor’s initiative passes; to be prudent most are preparing two budgets: “scenario A (taxes pass)” or “scenario B (taxes fail).” Since Governor Brown’s initative trumps Our Children Our Future if both pass, SFUSD and other districts are using pass/fail outcomes for the Governor’s initiative as the best/worst case scenarios.
SCENARIO A: UNRESTRICTED GENERAL FUND IF TAXES PASS
What the numbers mean: The school district began the current year with $55.8 million in the bank, which includes $16.6 million in “designated reserves.” These are funds that the state will not let districts spend, under any circumstances, because these funds are expected to be available to state regulators if and when an insolvent district is taken over. In plain language, school boards and district administrators do not have the authority to spend designated reserves. In SFUSD’s case, that leaves $18.7 million in cash that can be applied to the 2012-13 beginning balance.
2012-13: If you add the unspendable reserve of $16.6 million to the available $18.7 million in cash left over from 2011-12, you get a beginning balance of $35.3 million. Current spending projections, which include the expiration of the UESF contract concessions from 2010-11 and 2011-12, add up to $372.5 million. Expected state and Federal revenues add up to $318.6 million. After the beginning surplus of $35.3 million is added in and the required unspendable reserve is subtracted, the district is looking at a deficit of $35.5 million at the end of 2012-13.
2013-14 and beyond: Without any cuts (on top of the cuts we have made in previous years), and/or concessions (remember that earlier contract concessions like furlough days expire on June 30,2012), the negative ending balance in 2012-13 and subsequent years (indicated in red in the table above) is is a problem. The state will take districts over if they cannot demonstrate a positive ending balance at the end of the next fiscal year; they put you on a watch list and/or begin to intervene if you cannot demonstrate a positive ending balance for the following fiscal year or the year after that.
SCENARIO B: UNRESTRICTED GENERAL FUND IF TAXES FAIL
What the numbers mean: By comparing the A/B scenarios, you can easily tell that revenues take a hit in 2012-13 and 2013-14 if the taxes don’t pass, which has a corresponding effect on the ending balances for each fiscal year. Still, it’s also apparent from Scenario A that even with new revenues, education funding in California is not at all out of the woods.
How things stand now: There is a great deal of uncertainty around the district’s budget, not just because of the unknown outcome of the tax proposals (both of which may appear on the November 2012 ballot). In addition, district leadership and UESF are far apart in their understanding of the district’s fiscal situation, and of what is affordable and what is not. Last week, district negotiators declared that they had reached an impasse with UESF, but union negotiators disagreed with that position and believe there has not been sufficient discussion of their proposals. The district has appealed to the Public Employee Relations Board (PERB) to determine whether there is any use in the sides continuing to talk or whether a mediator should be appointed. (It would take hours for me to describe what each side has proposed, so if you are really interested you can find descriptions of district proposals here and descriptions of UESF proposals here).
The bottom line: As a Board Member, I have to decide whether the projections/scenarios above are valid, and whether the funding priorities that will be proposed in the Superintendent’s 2012-13 budget (to be introduced for first reading in early June) are fiscally responsible and in line with the Board’s policy priorities. On Thursday, UESF is holding the first of two votes required to authorize an eventual strike, and its members must decide much the same things: are the district’s publicly disseminated budget scenarios valid? Are the district’s proposals fiscally responsible and aligned with the district’s academic and policy goals? How do the UESF proposals align with the district’s academic policy goals, and are they equally as fiscally responsible as the district’s proposals?
Determining the answers to these questions is not easy, especially since the picture at the state level is still so unclear. Money that is expected today may fail to materialize if the taxes don’t pass in November. In declaring impasse, the district has asked for an independent mediator to evaluate the arguments on both sides, and help craft a proposed settlement that (in his or her judgment) addresses both sides.
So, layoffs . . . Until there is an agreement, the district must take steps to be sure its three-year budget is balanced ahead of the June 30 deadline. In February, the Board voted to issue 333 preliminary layoff notices to certificated employees (administrators, teachers, paraprofessionals, counselors, etc.) — those preliminary notices must be issued by March 15. In its resolution to issue those notices, the Board agreed to skip teachers in 14 Superintendent’s Zone schools, a controversial decision that required review by an Administrative Law Judge.
Yesterday, the judge issued her decision and ruled that the district must conduct layoffs according to seniority, instead of skipping teachers at some schools altogether. Though many Board members believe our original action would have had benefits to the Superintendent’s Zone schools — many of which are historically low-performing–after the judge’s decision we unanimously rejected the Superintendent’s proposal to proceed with the skip and instead adopted (6-1) a substitute resolution that follows seniority to issue permanent layoff notices to 210 teachers, paraprofessionals, nurses, counselors, etc. and eight administrators. As I said in my remarks before voting tonight, the board tried to do something noble by attempting to keep staffs at the Superintendent’s Zone schools intact — now we will just have to find other ways to support these schools and reduce their high rates of staff turnover.
Other items
- A petition to open a new KIPP charter high school was introduced and sent to the Curriculum and Budget committees. It will return to the full Board for a vote probably on June 14.
- A technical fix to the Board’s policy on required qualifications for new JROTC instructors (requiring them to enroll in a P.E. credential program soon after being hired rather than the original language, which stated they must already be enrolled in a P.E. credential program) will be heard in the Personnel and Budget committees and return to the Board sometime in June.
- Parents from Harvey Milk Civil Rights Academy came to protest the hiring process for their interim principal.
- A member of the public became angry when he saw President Yee and I chuckling during the layoff discussion — I can understand why it would seem insensitive to be joking during that discussion, and the timing was bad. Still, what we were laughing about was unrelated to the layoff matter being discussed — it was rueful acknowledgement that we had utterly bumbled parliamentary procedure in introducing an “amendment for substitution” as a “substitute motion” in place of the Superintendent’s original motion, and then calling for a second at the wrong time. Our mistakes required not one but two gentle corrections by Ms. Evelyn Wilson, our long-suffering Parliamentarian.
- Read “Schools Under Stress,” a report issued today by the education think tank Edsource. It’s a very thorough discussion of all the budget woes facing California schools.
Rachel Norton 
The reason I keep coming back to revenue is that I have noticed that conservative Republican strategists like Grover Norquist have managed to sufficiently “starve the beast” so that the cities and local governments are doing the union busting that used to be the standard operating procedure of the conservative right. While I don’t think you are suggesting any “union busting”, I cringe when I hear budget deficit and talks with the union in the same paragraph. Why is it that everyday people are constantly asked to cut-back – either on their job benefits or the quality of their public services – while people who make millions of dollars per year through investments (like Mitt Romney) have their taxes lowered?
When Grover Norquist goes on Jon Stewart, the first thing he talks about is pension reform. He does this because pension reform is needed and it also creates a convenient “villain” for city officials. Tax history and tax code is much more complicated. It is much more politically volatile. Most people are not aware that the highest marginal tax from 1950-1963 was 91% (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213). This high progressive tax rate in on the wealthiest Americans helped created the middle class, fund programs like the G.I. bill, keep income inequality at a minimum, and rebuild the American economy after the Depression and WWII. Since 2003 (the start of the Iraq War), the highest marginal tax rate has been 35% with capital gains taxes dropping even lower. President Bush was the first president to lower rather than raise taxes during war-time.
It used to be the status quo for public schools to have full time librarians, teacher’s aides, school nurses and counselors, full time art, music, and PE teachers. Now, these important parts of a child’s education are parsed out like pieces of bread on a soup line. When did we decide to be so stingy with our children?
I do not think that we should allow Grover Norquist and the “no tax” Republicans shape the debate about our public education system and the rights of workers. There seems to be a tacit agreement amongst city officials across the nation that we have all agreed to fight over the crumbs that are given to our public systems rather to generate the appropriate funds to keep our social contract. I assume that most residents of San Francisco are committed to a public education system that pays its employees fairly and has the adequate resources to educate its students in a way that will prepare them to be functioning and productive citizens. If the majority of people believe this to be a value and the government commits to this, then we should pay for it without so much conflict. The government, our public education system, our public parks, our infrastructure are not charity organizations. They are vital to our society. If the elected officials agree to programs, they need to stand up for them and create revenue to fund them. If they choose not to fund them, they need to make sure their constituency does not want them. Can the school board do anything to address the revenue side of the equation?
Unions are the last place in the United States where everyday workers have the ability to ask for a basic commitment from their employers for fair wages, health benefits, vacation and family time, a reasonable work week and work-load, and retirement funds. As a society, we need to ask, what is the value of work and what is the value of a person’s life-time of labor? Do we believe that a teacher should be able to teach without having to take a second job to survive? Do we believe that a janitor in a school should have adequate health care? Do all people, regardless of what jobs they performed during their work-life, deserve an old-age that is not subjected to chronic poverty? While I do think there needs to be pension reform and public service compensation needs to be evaluated, I think the discussion should be about what we as a culture value. Maybe the majority of people do not think that everyday people should have vacation time, health care, retirement pensions, or access to quality, public education. If that is the case, then we should not pursue revenue sources for our public infrastructure. We can starve the beast and it will die.
@JR:
Salaried employees (such as teachers, myself included) have their annual pay divided into 12 parts and payed equally throughout the year, regardless of actual number of days worked in a given pay period. For us, your proposal is a good one.
Unfortunately, there are many district employees who are payed each pay period for the number of hours worked that particular month, and having more than one furlough day fall in the same pay period (or all 4!) would create a significant hardship for some employees who would have a significant cut in pay concentrated at one point of the year. It is my understanding that this is the reason the district has spread out the furlough days. This would have to be addressed before clumping furlough days together.
If we were to clump them together, I would suggest having them all at the end of the year and making spring semester shorter. Fall semester is already several days shorter than spring because of all of the breaks and a desire to end it before winter break. Taking another 4 days out would really imbalance the two semesters. It doesn’t matter as much for elementary and most middle schools, but for high schools, the two semesters should really be balanced. As a high school teacher, I particularly like having final exams before leaving for winter break, rather than having 2-3 weeks of the semester (including final exams) coming after break!
To close the budget gap, we could ask voters to impose a small progressive supplemental parcel tax on all properties, including commercial property, of high value. For instance a .10% on all properties with a value between $1,500,000 and $3,000,000, a .25% on all properties with a value between $3,000,000 and $5,000,000, a .6% parcel tax on all properties over $5,000,000. Many high value properties are owned in trusts and protected by prop. 13 and are paying 1970s tax rates. I believe the TransAmerica building is one such case. If we could start to bring tax rates in line with current values, we would be able to fund many city services like public education. While owners might complain about additional taxes, their properties’ values are reliant on a well-funded, functioning city. In addition, I believe property taxes are a right-off for most property owners and therefore have a positive tax consequence when they are filing their tax returns at the end of the year.
I do not approve of teachers being unfairly penalized for our state’s incompetent budget practices via unpaid furlough days; however, if (and only if) the District must resort to furlough days, then I beg the BOE to string all the furlough days together at the start of the academic school year, starting school AFTER Labor Day (like the old days). It is absolutely disruptive to teachers and families to scatter furlough days willy nilly throughout the year. This practice makes it nearly impossible for teachers to get a decent second (summer) job to make up for lost salary if they so desire. It would be greatly appreciated to return to the post-Labor Day start of the academic year, with an adequate stretch of time (i.e., consecutive days) during the summer for teachers to enjoy time with their family and/or earn additional income.
Rachel, It must be very difficult and stressful for the board, having to deal with the budget problems and union negotiations while trying to figure out how to keep everything moving forward next year and beyond. Keep up the good work! I do want to note that there are still parents like me who are asking you to approve waivers for children who are ready for kindergarten but who don’t meet the new birthdate cutoff. This would be a win-win: it would provide access to kindergarten for our children and it would allow the district to avoid losing money on empty seats. We are also asking for TK classrooms on the NORTH SIDE OF TOWN. Those of us who do not drive and who live, work and have older children in school on the north and northwest sides of town are shut out of TK under the current plan. Your help on this is very much appreciated, thank you.
Rachel,
Thank you for your important discussion of the budget. As it looks like the the district will have a budget deficit even if the state tax measure passes, is there any discussion of a SFUSD tax within the county of San Francisco? As San Francisco has a few billionaires and many millionaires within the city limits, it seems there should be some way to pay public school teachers fairly, kept unions intact and functioning, and fund the public school system. Recently, there has been a lot of discussion about income inequality and its impact on democracy. I think most would agree that a functioning and vibrant public education system is a key component in maintaining our democracy. Can’t we find a way to support it? Yesterday, the radio show Forum featured a discussion on the public school system. More furlough days are in consideration because of the budget crisis. We could end up within one of the shortest school years. California is one of the wealthiest states in the nation and one of the most robust economies in the world. We should have one of the well-funded public education systems in the country, not one of the poorest. Our per capita spending per student should be at the top, not at the bottom. How come there is such misalignment between the wealth in our state and the funding of public education? What is going on? In San Francisco, can we bridge this gap?
Is our current system of seniority in assignment being discussed in the current contract negotiations? Skipping the Superintendant’s Zone schools in layoffs seemed like a decent work-around to address a real problem — some schools have stable, experienced staffs, and other schools have high-turnover staffs that are relatively inexperienced. I can’t think of another job, even unionized, where the employee gets to decide where he or she is assigned. Generally, the employer assesses the need, and assigns staff accordingly. It seems like it would be in the best interests of the children to rethink teacher seniority in assignment so that all schools have a relatively balanced mix of experienced and novice teachers.