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San Diego School District
 

08/25/10   The School District budget crisis - an analysis.
    by Pat Flannery                                                              top^


The San Diego School Board will meet in special session on Tuesday 5:00 P.M. August 31st to discuss this letter from the County Superintendent of Schools, Randolph Ward. The letter imposed a September 8, 2010 deadline for the District to adopt a revised budget that will be acceptable to the County Superintendent. In the meantime the District is operating at the pleasure of the Superintendent. He has the power to declare the District to be "not a going concern" at any time.

The County Superintendent has set a further deadline of October 8, 2010 when he will determine whether to finally approve or disapprove the District's amended budget for fiscal year 2010/11. The District has already identified budget reductions of $104.3 including cutting 31.5 certificated full-time employees (FTE) and 81.5 classified FTE, but that will not be enough.

In addition to further payroll and benefit cuts, he is requiring that the District "makes progress" in meeting the state minimum reserve requirements of 2%. The District's current budget for 2010/11 would have a reserve of only 0.44%. A 2% reserve would pay one week's salaries, while 0.44% would pay for one day. This is unacceptable to credit agencies and to the State.

Much has been made of the State's failure to timely pass funding legislation for Special Disabilities expenditure, but it is a diversion. It does not begin to explain the budget crisis. Even if the State quickly corrects the issue it would be a mere $9 million in the 2010/11 budget.

Here is the original 2010/11 Budget adopted by the School Board on June 29, 2010 and submitted to the County Superintendent of Schools. This graph shows the component parts of the $1.166 Billion General Fund. This shows the real cause of the crisis. I have graphed the numbers for clarity:

Salary and Benefits as a Percentage of Total General Fund

Salary and benefits are over 90% of the School District costs and growing!

There are two main types of school employees, teachers and support staff. Teachers belong to the San Diego Education Association (SDEA) and are called "Certificated" while most non-teaching staff belong to the California School Employees Association (CSEA) and are called "Classifieds".

Here is the School District's June 15, 2010  Presentation to Moody's Investment Service in connection with its Proposition S bond issue. Page 10 shows that the District has 8,027 Certificated employees and 8,020 Classified employees for a total 16,047. Page 12 shows the enrollment from 1991 to 2010. For 2010 the District has estimated 132,370 students.

Dividing the $1.166 Billion General Fund by the number of students we get $8,805 per student. Salaries and benefits is $7,930 per student with only $875 for everything else. The average salary and benefits per certificated employee is $95,680 and the average per classified employee is $35,121. There are 16.63 students per certificated employee and 16.67 students per classified employee with 8.25 students per employee overall.

As you can see, 66% of the General Fund expenditure is for members of the 8,000 SDEA, the teachers union. This core expense is at the heart of the budget crisis. This graph illustrates it very clearly. The half billion dollar SDEA salary cost is the elephant in the living room. Now look at this graph showing the recent history of the District's expenses. It shows a wild increase, mostly teacher salaries, in 2006 and 2007, at a time when enrollment numbers were actually declining.





2010 teacher salaries, the biggest component of the District's budget, must be brought back to at least 2005 levels. The 2010 enrollment numbers are actually lower than 2005. At the very least the District must reverse its 2006 and 2007 expense buildup when money was plentiful.

The School's 2006/2007 salary binge is very reminiscent of the City's 2002 pension binge. Both were the result of unions having gained control of voting bodies. Now they both want the taxpayer to bail them out. I hope these graphs and figures help people understand what is really going on. It is much more than a Special Disabilities issue that Marty Block will fix and everything will be alright.

It will be an historic School Board meeting on Tuesday 5:00 P.M. August 31st, similar to that fateful City Council meeting on November 18, 2002. Let's hope the unions and School Board do not repeat the City's disastrous pension mistake. It may be too late for the City but it is not too late for the School District. The future viability of the San Diego School District together with several political careers will be decided on Monday.
 

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