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.
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.
- 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.