TUSD Budget Paints Cloudy Financial Future
TUSD Deficit Spending Over Next Three Fiscal Years
Last Monday evening the TUSD School Board approved a budget forecasting over $31 Million in deficit spending over the next three years. The deficit spending will have a dramatic impact on the District’s reserves. The Board had a budgeted reserve for economic uncertainty of $46.1 Million as recently as FY 2013-14. The forecast now indicates it will plummet to negative $6.2 Million within three years. That figure is well below the state mandated minimum of 3% (or about $7.3 Million).
During a prior presentation on the budget, TUSD Deputy Superintendent Dr. Stabler commented that a 17% reserve is a nationally recommended standard that Districts should have available and reminded the Board that the District recently held a reserve as high as 25%.
TUSD Budgeted Reserve
Notwithstanding that standard, Stabler explained that the District was intentionally spending down the reserve at the behest of the School Board. Alluding to why the Board took such action he said, “It’s the unions that don’t want us to have a reserve because they want to spend the money on salary increases.”
Torrance Teachers Association (TTA) President, Julie Shankle, took exception to Stabler’s comments quickly rising to the podium after he spoke to assert that:
“Unions are not opposed to Districts having a reserve … we just believe that money that goes to school districts should be used to educate children and should be used in the classroom. It’s not for getting salary raises.”
In seeming contradiction to Shankle’s statement, the Board just allocated a significant amount of its reserve to pay for a labor agreement reached with TTA giving teachers a 4% raise, a $2800 bonus, and a $500 increase to their health and welfare contribution.
The current budget, however, assumes no additional teacher salary increases for the next three years. Thus, any additional salary increases reached with the labor unions will further impact the budget.
Another factor that could impact the District’s financial outlook is the outcome of ongoing litigation. That litigation includes a lawsuit brought by at least 18 former students who claim they were molested by a former TUSD wrestling coach and another filed by the parent of two children who were hit by a car in a crosswalk on their way to school.
Speaking about that potential impact, Stabler noted that the District has $25 Million worth of insurance coverage and said that, “We don’t know what will happen with their lawsuit, but we feel the $25 Million in coverage should take care of it.”
Los Angeles Unified School District recently settled a case alleging similar circumstances to that of the Torrance wrestling coach for $88 Million.
The TUSD budget could also be impacted by the outcome of a proposed extension to the Proposition 30 tax increases. The extension is heavily backed by the California Teachers Association and is expected to be on November’s ballot.
TUSD’s budget is based on the ballot measure not passing. Of its potential passage Stabler said, “We don’t know what effect that will have on our budget, but it should be very positive.”
Stabler also attempted to alleviate any concerns about the budget and the diminishing reserve by stating, “We are aware of the situation and the Board and the Administration will deal with it.”
The Board meeting and budget presentation was Stabler’s last as Deputy Superintendent of the District as he recently announced his retirement.
No worries plenty of money in bond funds, if not they will just pass a new one. Keep believing them “it’s all for the kids”.
You do know that bond funds cannot be used to run the schools or pay teachers, right?
Yes I do, but can always pass new ones!
I commend you for wanting to protect school budgets, but I have a couple of questions. I watched the same school board meeting. The budget picture hasn’t looked much different for a couple of years now. Dr. Stabler speaks about the budget multiple times each year, so these numbers have been around since before Christmas. When I talk to school board members, they have said for a couple of years now that the district is “deficit spending” to put reserve dollars back into the classroom (when I asked one board member why, the reply was that they built a 30% reserve through teacher layoffs, ballooning class sizes, and instituting “furlough” days and it was time to put the money back into the classroom). So this “deficit spending” you are highlighting is not new. So question #1: why is it only now an issue? Shouldn’t we want the money taken from kids and their classrooms put back into them by lowering class size (which means recruiting and hiring new teachers) and replacing books that older than most high school students? As a concerned parent, I don’t want the district to go bankrupt, but I also don’t want the largest class sizes and worst paid teachers in the area. I want what is good for kids.
Question #2: Did you look at the LCAP presentation and the Special Ed presentation form that night with any detail? I had a lot of questions after hearing Dr. Stowe and Pam Branch speak. You highlight that the district is giving a 4% raise to teachers, but you didn’t notice all the new positions being created in the reports given by these two–including a dozen new administrative positions that equal over $750,000 in new ongoing spending. It looks like the LCAP is the new way to bring in new spending while it’s buried in a 93 page document. http://tusd.org/LinkClick.aspx?fileticket=JgDCNlW5PPo%3d&tabid=3405
Question #3: Do you believe that 17 cents of every dollar in taxes you send to TUSD should be put into a savings account instead of putting that money in the classroom, even if that means recruiting and retaining highly qualified teachers? The reason I pick 17 cents is that what Dr. Stabler recommended. You do realize that TUSD is still among the worst paying districts in the area? And that the LCAP made its number one priority the recruitment and retention of highly qualified teachers? How does a district that saves all of its money and pays less than all the other surrounding districts do that? So a 4% raise doesn’t seem so out of line in this light. That raise puts TUSD at barely keeping pace with the surrounding districts and raises they have been getting.
Question #4: Do you believe that teachers or their representatives want TUSD to go bankrupt or into state receivership? Do you think that Dr. Stabler set TUSD up to go bankrupt by agreeing to expenditures that would cause this? These are pretty serious accusations that you insinuate in your article. I’ve read some horror stories about what’s going on in Inglewood because of the state receivership. I can’t imaging anybody in TUSD thinking that is a good thing.
P.S. the fall proposition to which you refer has officially been approved for the November ballot. It will keep millions in our local schools and prevent another round of layoffs that we are only now beginning to recover from. It is called the Children’s Education and Health Care Protection Act. It would seem odd if you oppose continuing taxes on the wealthiest in our state, but support appropriating the limited remaining funds into a large reserve account. At what point do we agree that funding education is a priority in our great state and community?
How much money do you think is acceptable to spend per student per year Rosie?
At least enough to put us in the top 10 in the nation–California currently ranks 41st in the nation on education spending and is nearly $2,000 under the national average in per pupil spending. Then add the fact that Torrance gets less per student than many of the districts surrounding us, we are even further behind. Yet we live in a state that has the 8th largest economy in the world.
That doesn’t give me a number. Is $8,000 enough? $10,000?$15,000 per year?
Let me remind you there are plenty of studies that suggest just adding more money is not the solution to our inadequate school system.
Rosie, I know this is a belated response but I thought you posed some good questions and so I will endeavor to answer them if for no other reason than to capture my feelings on the subject.
Response to question #1: The budget is always an issue and a worthy point of discussion. I am aware that the School Board discusses it multiple times a year, but I do think Dr. Stabler presented some new information in this latest presentation that should be eye opening to all those concerned about the future financial picture of the District. I am glad to hear your concern for maintaining low class sizes. I worry, however, that unless something changes the current course will leave the District with no other choice but to cut spending to maintain a balanced budget. In the past, that has meant laying off teachers. Should that occur again, I would find it very unfortunate as I believe such an action could be avoided with more prudent financial planning.
Response to question #2: I wrote about some of the new positions in a recent posting on this site. I suggest you read that posting and the comments for a sampling of how some feel about the issue.
Response to question #3: Yes, I do believe the District should maintain a healthy reserve just as I would recommend to any family that it is wise to maintain a healthy savings account. To maintain a reserve, you do not need to spend 17 cents of every dollar as you suggest. Once a reserve is established, future revenue can be devoted entirely to the classroom.
Response to questions #4: No, I do not believe anybody associated with leading our schools would want the District to go bankrupt, but based on the data presented in this budget I do worry about the District’s financial future. What if the proposition doesn’t pass or the hoped for funds never materialize? What budget cuts will the District be forced to take? Will teachers be willing to take furlough days or pay cuts? I don’t think it’s wise to pin so much of the District’s financial future on a state proposition that has no guarantee of passing.