At
the onset of 2012, our school district continues to face significant
financial challenges stemming from the deep and prolonged state budget
crisis. Five years of K-12 education cuts has taken its toll on
everyone. All of us who care deeply about preserving the quality of
education will struggle with balancing tough trade-offs in the weeks and
months ahead.
In this letter, I provide a first look at the
2012/13 budget to establish a common appreciation of the district’s
fiscal realities. During this very difficult time, it is critical that
we all comprehend the realities that we must face together and that we
openly communicate with one another about our concerns. I believe that
it is important for every employee, parent and community
member understand the basics of our budget situation and to appreciate
the difficult work underway by the Board and our staff to balance our
budget. I am very sensitive to Board meeting testimony and casual
conversation that suggests that this will be a better budget cycle with
new resources and minimal cuts. That is not the case based on current
information.
The fiscal landscape is a very sobering one as outlined below.
Budget
Reality #1: The Governor’s Budget Does Not Increase School Funding. The
proposed November Ballot Measure Does Not Improve K-12 Education
Funding.
Contrary to some early media reports, the proposed
2012/13 budget IS NOT a good one for school districts. The great
ambiguity associated with state revenues, the legislative turmoil in
Sacramento, and the high stakes gamble of a November ballot measure has
put us out on a limb.
- School districts will not receive new or additional funds for educational programs or staffing.
The proposed K-12 state budget is one of flat funding. San Diego
Unified will experience about the same funding level next year as this
year. A flat budget is a negative budget because there are no
cost-of-living adjustments for fact-of-life expense growth tied to
utilities, health care, fuel, and the like. With flat funding from the
state, our district will still face a significant deficit which I
explain below. Rather than provide any real increase in resources, the
proposed state budget is shifting money to remove previously planned
deferred payments to school districts. This means we may receive our
General Fund allocations in a timelier manner, but no additional money
from redevelopment agency accounts or other sources.
- School
districts face a potentially HUGE midyear cut dependent on the passage
of a tax measure by California voters in November 2012. The
Governor’s strategy for a November ballot measure also has NO additional
money for schools; it would just keep our funding at the current
threshold. Simply put, a successful ballot measure only preserves the
status quo for K-12 funding. But, per the proposed state budget, a
failed ballot measure could result in a $4.8 billion cut to education.
The governor’s staff has said that a funding reduction of this magnitude
would be the equivalent of cutting three more weeks off school next
year. Such an outcome translates into a devastating resource cut halfway
through the school year.
Budget Reality #2: Our Expenses Exceed Our Revenues.
For
several years, San Diego Unified has been able to partially offset our
revenue shortfall by using one-time funds and reserves. This amounts to
deficit spending and it must stop. We continue to face a reality that
the district’s total operating expenses significantly exceed our total
annual revenues. Given that there are no additional monies forthcoming
from the state, we must significantly cut district costs again,
recognizing that more than 90% of our expenses are connected to salaries
and benefits.
The fiscal facts are straightforward:
- San
Diego Unified is projecting an operating deficit of more than $90
million for the 2012/13 fiscal year and more than $125 million in
2013/14 if budget reductions are not made.
- There no longer are adequate reserve funds to accommodate revenue deficiencies.
- Our expenses must be realigned to match our revenues for the district to become financially stable.
- Our
Board of Education is committed to balancing the district budget and
will do everything necessary to maintain the district in a solvent
position, thereby avoiding a state takeover.
- Positive cash management remains a crucial and challenging element of the district’s budget.
Budget Reality #3: We Have to Fix a Multi-Year Structural Deficit Problem.
To
achieve and sustain a stable financial footing, it is necessary to
solve our multi-year structural deficit with ongoing expense reductions
and limit the use of one-time solutions like proceeds from the sale of
real estate. My goal is to guide the Board to a plan that can stabilize
our budget not just for next year, but for the foreseeable future to
avoid the annual trauma of program cuts and layoffs.
Financial
stability is dependent on making very difficult reductions for the
2012/13 and 2013/14 budget years. Our list of cuts, reviewed by the
Board at the first interim financial report presentation on December 13,
will serve as the basis for more than $150 million in reductions to our
General Fund Unrestricted budget over the next two years. These
adjustments include significant class size increases and educational and
support services decreases, actions that no one wants to even
consider…but unfortunately that is our reality.
Budget Reality #4: Given No New Revenues in Sight, Both Employee Concessions and Layoffs Must Be Considered.
With
flat budgets looming in the “best case” scenario and expenditures
exceeding revenues, the District has few options with which to overcome
the budget shortfalls. We are at a crossroads where the choices are
bleak and severely impact both central office and campus operations.
At
this juncture, the Board has asked that we reach out to our unions to
address a package of employee concessions that can help the district
mitigate the number of layoffs needed to balance the budget and
safeguard our academic and administrative programs so critical to
student achievement.
We are hopeful that the conversation with the
employee collective bargaining teams will begin in the very near
future. Some suggested concessions include deferring the negotiated
salary increases in current contracts, continuing the current five-day
furlough of the last two years, applying salary rollbacks, and/or
reshaping health benefit contributions. Contingencies also have to be
considered in response to mid-year cuts. We all must approach these
negotiations open minded and committed to equitable agreements that
lessen the blow of personnel reductions and personal sacrifices.
What’s Next?
On
Jan. 24, Chief Financial Officer Ron Little and I will present a budget
overview to the Board of Education. In preparation for that meeting, we
are collecting technical information, analyzing the proposed state
budget, and updating our financial projections. A key element of this
work will be the direction received from the County Office of Education
about factoring midyear cuts into our proposed district budget.
We
are also stepping up advocacy with our elected representatives in
Sacramento. “The devil is in the details” and that is very true for the
state budget. We are awaiting specific legislative budget language
forthcoming in early February. It will provide more details about how
school districts can be expected to implement a possible midyear cut,
such as legislative authorization for a three-week school reduction as a
contingency.
We will continue to face great uncertainty about our budget for the next six months.
The state budget will evolve and change during a time when school
districts are required to make layoff notice decisions. This is a
terribly disconnected process where local agencies act on and react to
State government decisions with no synchronization between the two
parties. We are likely to face the reality of issuing March 15
certificated layoff notices in unprecedented numbers and subsequently
rescinding some number as budget details are updated and employee group
negotiations become finalized.
In conclusion, the budget situation
is very serious, but one we can overcome through our demonstrated past
resiliency and commitment to expending our best efforts. Let me assure
all of you that I will continue to present complete and factual budget
information to you and the Board. I will devote all of my energies to
finding solutions that can minimize the impacts of these difficult
fiscal realities.
I ask that each of you continue to stay
focused on our mission to provide a quality education to our students
each and every day. We are a team and by working collectively and
collaboratively, we will get through the worst of times in California
public education.
Sincerely,
William Kowba
Superintendent
Human
rights, food security, the use of child-soldiers and nuclear
disarmament are being researched as students at several schools prepare
for May's Regional Junior Model United Nations Conference.
Dancers
from the San Diego School of Creative and Performing Arts will be
performing under the direction of internationally-known choreographers
and in front of an international audience in March at the prestigious
National High School Dance Festival.
More
than 1,000 Mission Bay High School students were introduced to a
variety of careers at a career-ready event, "If The Shoe Fits."
During
winter break the Greater San Diego City Tennis Council held a
groundbreaking ceremony for a renovated four-court community tennis
complex at Roosevelt IB Middle School. In addition to the tennis court
upgrades, the project includes improvement of the existing sand surface
field to a multi-purpose grass park. Both developments will provide an
enhanced experience for the student body as well as the community. 
De Portola Middle School’s award-winning Advanced Chamber Orchestra and Symphonic Band were the opening acts at the Balboa Park Annual December Nights event. It was the first time the de Portola Middle School Instrumental Music Program performed at what has been called the “nation’s premier holiday festival,” held in the historic Spreckels Organ Pavilion. 
More than 70 students, staff and community members involved with Student 2 Student (S2S) clubs in San Diego County came together January 7 to share best practices and energize school programs at the first-ever Student 2 Student Council Day. 
Students at Cabrillo Elementary received a rare treat on Wednesday as Clifford the Big Red Dog visited students during their Reading is Fundamental (RIF) book distribution. 
In early December, second and fifth grade students from Doyle Elementary School made a special visit to Vi at La Jolla Village, the school’s new Partner in Education. Vi is a high-rise retirement facility not far from the University City elementary school campus. The visit was part of an intergenerational learning experience.
Thanks
to the generosity of community members, businesses, schools and
district employees, our students who are experiencing homelessness had a
brighter holiday season. The Children and Youth in Transition
Department received donations of food, clothing, shoes, and recreational
items, including: 
Back
by popular demand, the Fourth Annual Enrollment Options/Magnet All Schools
Fair will take place from 10 a.m. to 3 p.m. Saturday, Jan. 28, at
the Recital Hall in Balboa Park (next to The Puppet Theater). More than
1,500 families attended last year's event. 
Board Member John Lee Evans and Supt. Kowba with JROTC at Mira Mesa High.
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