TUSD Budget Paints Cloudy Financial Future
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%.
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.