San Diego Unified's Budget Woes Widen to Include Potential Layoffs - Voice of San Diego

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San Diego Unified's Budget Woes Widen to Include Potential Layoffs

San Diego Unified will again consider laying off employees to help close a $70 million budget hole expected next year following across-the-board raises.

San Diego Unified Trustee Richard Barrera said despite the district’s current budget predicament, it would have been wrong to withhold the recent across-the-board 3.7 percent raises for San Diego Unified’s 10,500 employees. / Photo by Jamie Scott Lytle

San Diego Unified will again consider laying off an unknown number of employees to help close a $70 million budget hole expected next year following across-the-board raises, according to new projections presented to school board trustees Tuesday night. The gap increased from a $58 million shortfall estimated in September.

The district’s chief business officer, Greg Ottinger, gave no explanation for the change before asking trustees to greenlight unspecified reductions and positively certify the district’s $1.44 billion budget, a move indicating the district will be able to pay its bills in the next couple years.

More budget cut details will come before March 15, but in Tuesday’s presentation, the district called out “strategic layoffs of certificated/classified as needed in March” as a “potential shift” and listed a hiring freeze, spending freeze and program shifts among solutions.

In more bad news, district leaders anticipate outspending general fund revenues by $64 million by the end of the current year, up from the $38 million deficit anticipated in September, district budget records show.

Ottinger did not discuss that deficit increase either, and VOSD’s questions about both changes have gone unanswered.

The higher deficit may point to deep cuts ahead, if past low points in 2010 and 2017 are any indication. Here’s a look at how the district’s general fund spending has fared over the years, as revenues and expenses have ebbed and flowed.

Despite the challenge ahead, school board Trustee Richard Barrera praised the district’s leadership team, including Superintendent Cindy Marten.

“When we look at a $70 million challenge at this point in time … we know that we turn over every rock every time we go through this budget process. That there is no efficiency that we don’t identify that we use to then provide a budget solution. This is the most efficiently operated school district that it’s ever been. And it’s the most efficiently operated that a school district can possibly be,” he said.

In a familiar turn, both Ottinger and Barrera pointed to Sacramento as a primary source of their budget woes.

“Quite frankly, the costs to operate the organization are increasing much faster than the revenues that we are provided by the state,” Ottinger said.

District budget records show total general fund revenues surged to an all-time high last year, with most of the $1.43 billion coming from the state. Revenue projections total $1.38 billion for next year.

“It’s a revenue issue,” said Barrera, who criticized the state for amassing an estimated $18 billion rainy day fund by 2021 that he said could be used to increase education funding. Barrera also pointed to California’s poor performance in education funding analyses that take into account cost of living. He then argued escalating state pension contributions required of schools aren’t necessary to keep the pension fund solvent.

Ottinger also lamented the pension contributions needed by the district, and said the millions extra going toward pensions could be spent elsewhere.

Barrera said despite the district’s current budget predicament, it would have been wrong to withhold the recent across-the-board 3.7 percent raises for San Diego Unified’s 10,500 employees, a move that added $45 million in annual operating costs and blew up the district’s balanced budget.

“Some people want to say that the solution to our budget challenge every year is to simply pay our employees less. Yes, if our employees were paid less, the district would have more money. That is true and obvious. And it is also true and obvious that if we were to do that, if we were to fail to allow our employees to keep up with the basic cost of living every year, that we would have a very difficult time recruiting and retaining employees. And we know that this district has benefited significantly from stability of our employees,” Barrera said in a14-minute speech. “The answer is not to not allow our employees to keep up with the cost of living … where we would be seeing continued and significant turnover of our employees every single year, because they cannot simply afford to live in San Diego. That is not the answer.”

State data shows San Diego Unified’s average teacher salary was $80,624 in 2018, roughly the same as the state average for all districts. The latest raises pushed the top teacher base salary above $100,000 for the first time, according to a district press release.

San Diego Unified continues to provide full health care coverage to employees and their dependents. The cost of health benefits paid out of the general fund dipped in 2018 following layoffs but are expected to rise at the end of this year by $9.7 million. The district is budgeting annual 6 percent increases for health care premiums in the coming years, records show.

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