With the threat of a state takeover looming, teacher pay and benefits will be targeted for cuts in the financially troubled Paso Robles school district, the head of the teachers union said.
Teachers are going to be asked to provide the solution, Jim Lynett said during a board meeting Tuesday night. We are going to be asked to make a sacrifice to cover these shortfalls.
When the district gave itself a negative certification earlier this month, it signaled that it was not going to be able to meet its financial obligations this year.
While it faces cuts of up to $2 million this year, that number might grow if the state continues, as expected, to make cuts to education funding.
If the district cant find a way out of its financial troubles, an adviser told the board, the state will take over, and local control will be lost.
Because salaries and benefits account for 91 percent of the districts $54 million budget, thats the most obvious place to cut costs, said Maureen Evans, vice president of School Services of California, a nonprofit hired by the school district to analyze the budget and offer recommendations.
Thats just a reality, she said, noting that compensation has become a larger part of the budget because other areas have already been cut.
The district might consider pay cuts, furloughs, a shorter school year and benefit reductions, she said.
The district and school board arent at fault for its troubles, Evans noted, because they based this years budget on state projections, which called for revenue increases. When revenues didnt come in, that left the district short.
Your budget assumptions were reasonable based on the information you had, Evans told the board.
Some districts in the state, including districts in King City and Oakland, have had to take out loans to solve their financial woes the worst-case scenario, according to Evans.
When loans are issued, the state takes over for the duration of the loan, which is typically about 20 years.
If Paso Robles took out a loan, Superintendent Kathy McNamara would lose her job, and the school board would lose its authority.
A negative fund balance is a very scary thing, said Mary Jarvis, assistant superintendent for the San Luis Obispo County Office of Education, which will oversee the districts efforts.
But, she added, a state takeover can be avoided. If the board acts this year, there will be no state takeover next year.
With the stakes high, the teachers union, which has avoided cuts in the past, will likely be asked to agree to cuts. Administrators note that they have taken furlough days in the past, but teachers have not.
The average teacher salary in Paso Robles is $70,000 a year.
But, Lynett noted, teachers have suffered multiple rounds of layoffs, which have increased class sizes, and they have not had a cost-of-living increase in three years.
Lynett insisted that teachers be included in any talks about the districts financial strategy.
While he didnt rule out the possibility of furloughs and more layoffs, Lynett said he also wants the board to consider requesting a parcel tax, which would require the approval of two-thirds of school district voters.
The board shot down a parcel tax proposal, which would have cost property owners $8 a month, in March 2010.
It is a tax, and thats too bad, Lynett said. But sometimes you have to pay a tax to get what you need.
Yet, a parcel tax, which would bring in an estimated $2 million, would likely only diminish the problem if the voters approved it. Plus, the districts financial problems are more immediate.
The district clearly has a deficit it needs to deal with, Evans said.