San Diego Unified could dip $2.5 million into the hole next spring because California is putting off payments to schools, even more than the school district had been expecting.
Its finance chief says that makes it impossible for the school district to rehire any more of its jettisoned employees. It could also force them to let go more school workers who don’t teach.
“This is a very sobering report,” Superintendent Bill Kowba said. “The common theme is incredible risk from one week to the next.”
Nearly half of its day-to-day state money will come in late, putting it at risk of going into the red. San Diego Unified can still count on the money in its budget. But it has to borrow to cover its costs until it actually comes in. So the $36 million in surprise revenue the district got in the wake of the budget’s passing only means $20 million in cash this coming year.
The California budget was widely greeted as good news for schools, giving them roughly the same amount of bread-and-butter funding as last year. With that unexpected money, San Diego Unified added more than 300 jobs for elementary school teachers to keep class sizes from ballooning next year.
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Bringing back teachers was cheered by parents and the teachers union, but financial hawks warned that the money to restore those jobs was uncertain, relying on rosy projections from the state that may or may not pan out.
This is another, completely different risk for school budgets: not how much money they will get, but what to do when they don’t get the money when they need it. California has pushed off payments to schools as a budget gimmick.
That frustrates school districts because it means they have to borrow to get money they’re supposed to have. School districts like San Diego Unified have been promised a check. They need cash.
Chief Financial Officer Ron Little said San Diego Unified will try to keep itself above water in the spring by recovering some unreimbursed costs from the state and freezing its hiring. Its last resort would be laying off workers who don’t teach, who can be let go in the middle of the school year.
The school district also fears that other unexpected costs could worsen its cash problems to the tune of another $5 million to $7 million, including paying to settle labor disputes and the added costs of covering mental health services that used to be shouldered by counties.