Insolvency Avoided, New Budget Is Fixable

What a difference one week makes. Just last week, Sac City was on the verge of fiscal insolvency. Not anymore (see below)

The latest budget document circulated by the District at community forums contains two huge developments:

1. The District made a $16 million mistake by undercounting at least 700 students, a mistake that SCTA has been pointing out since January.
2. The District has now doubled its projected reserve from the state required 2% (about $11.5 million) to 4% ($23 million).  So when the District says it now projects a $34 million deficit, approximately $23 million (an extra $11.5 million for two years) of the $34 million “deficit” is a result of a higher reserve goal—money that should be spent our students.

Many of have speculated that the budget crisis was manufactured.  We can’t say whether it’s that or human error.  But either way, the District’s budget fiasco, is, at it always has been, easily fixable. 

The new budget fully implements the SCTA salary schedule, and enables health plan savings to be used to lower class sizes and improve services to students (as legally required by the contract).  It does not implement SCTA’s budget solutions that would:  1.  Chop from the Top; 2. Use retiree health insurance overfunding ($8.5 million per year, or $25.5 million over three years) 3. Or reduce contracts to outside consultants and more. 

With SCTA’s reforms, the SCUSD structural problems could also be fixed.  The real question is whether District leaders are prepared to work with educators, parents, students and the broader community to create a district that truly puts students first.