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The district announced Tuesday that it plans to raise $50 million by selling property to fill its budget deficit.
Gov. Jerry Brown has spent the last couple of years trying to rid Sacramento of its budget gimmickry.
But San Diego Unified has gone full speed ahead in the opposite direction: On Tuesday the school board voted to ratchet up its efforts to sell off some of its properties, a one-time budget solution that patches over the district’s deficit in the short-term but leaves the district a few properties poorer forever.
In a workshop Tuesday morning, school board trustees voted 4-0 (trustee Scott Barnett was absent from the meeting but opposed land sales last year) to move forward on selling four properties to raise $50 million — thus solving the bulk of the district’s projected $84 million deficit in the 2013-14 school year.
Brown has urged the state to balance its budget with long-term, structural changes like new taxes and spending cuts, rather than one-time solutions that kick the can down the road. Foremost in the governor’s goals has been fiscal stability: providing long-term solutions to the state’s ongoing budget yo-yoing, with a specific focus on providing stable funding for California’s 1,000-plus school districts.
Last year, San Diego Unified sold off two properties, for which it received about $19 million. The board also approved selling two other properties, including a sought-after parcel in Mission Beach, but the trustees balked at those sales after residents raised concerns about how the properties would be used.
This year, the district will have to sell those two properties in addition to two other parcels it owns in Sorrento Mesa, to raise the full $50 million.
Board President John Lee Evans said he’s confident this will be the last year the district resorts to selling off land to balance its books.
“I think we can even out in 2014-15,” Evans said. “Though, there may be good reasons to sell property for longer-term things, it may be a better way to use our capital.”
District officials, including city schools’ new Chief Financial Officer Stan Dobbs, said they simply don’t yet know how much new revenue they will receive from Sacramento next year and the year after. Brown has promised consistent increases in school funding, along with radical reforms to the way districts are funded, but districts can’t yet accurately estimate how much money they will get in future years.
For the trustees, the land sales are a way to avoid the emotional turmoil that comes with issuing hundreds or even thousands of layoff notices to teachers. District Chief of Staff Bernie Rhinerson billed the new budget solution as “property vs. people.”
The move also allows the district to put off other long-term approaches that might tackle its seemingly never-ending budget woes. The district’s special education department continues to spend more money each year, despite a steadily declining enrollment. District officials have targeted dozens of schools that could potentially be closed to save money, but past efforts to close small, underperforming schools have met with political friction that led the board to change course after months of work by staff.
There wasn’t much dissent in Tuesday’s meeting.
Barnett has vehemently challenged the wisdom in unloading assets, likening the move to a family selling off its furniture to pay the rent. Barnett wasn’t at the morning meeting, but he later sent me a comment by text message.
“We have a $50 million shortfall because the school board agreed to raises without having the money to pay for it. Selling valuable real estate assets, to pay for ongoing expenditures is bad policy,” he wrote. “I have, and will, continue to oppose land sales to fill budget gaps.”
Along with the land sales, the trustees voted to move ahead with a concept they called an “attrition-based” budgeting model.
Essentially, the board vowed to get strict on not replacing teachers who leave the district. In the past, the district has ended up replacing many of the teachers who retire, resign or move away each year, Evans said, and that has to stop.
“It’s just been a really loose system,” Evans said. “What we’re doing is to really tighten that up and say that when someone leaves, we’re going to do everything possible to not replace that person.”
The district estimates that it can avoid replacing about 300 teachers a year this way, which would amount to savings of as much as $30 million a year.
The trustees also voted to move ahead with a plan that would transition the district’s year-round schools to instead follow the traditional calendar year. This move would cost the district about $13 million to implement — money that the board hopes will be left over from this year’s land sales — but would save a few million dollars a year on an ongoing basis.
Superintendent Bill Kowba cautioned the board that one-time fixes must be accompanied by meaningful structural reforms to save money.
Kowba later acknowledged there are other changes the board could make that would address the budget issue long-term, but said until the district has more clarification on how much extra funding it will receive from the state, it has to face the reality of its projected deficit.
“We’ve gotta make a trade-off between the emotional rollercoaster of what our staff has been through and what that means in translating to a negative impact on kids, or simply try to understand this as a transitional year.”
Update: Here’s a map of the Mission Beach land for sale (Google):
Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at firstname.lastname@example.org or 619.550.5670.
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