Monday, October 31, 2011

NEWS RELEASE -- Barnett Calls for Pay Cut, Parcel Tax to Save District from Insolvency

NEWS RELEASE, October 31, 2011

Barnett Calls for Pay Cut, Parcel Tax to Save District from Insolvency

District Facing Budget Cuts of $60 to $110 million

Plan would extend school year, maintain class sizes and protect programs

Calls for saving $92 million by deferring raises, a 10% pay cut and
restructuring health care plan. A proposed November 2012 parcel tax would
restore $60 million in pay.

SAN DIEGO ­ San Diego Unified School District (SDUSD) Board Trustee Scott
Barnett released his "Plan to Save Our Schools" today.

"Bold, yet prudent action is needed to save our schools and protect our
children's education," said Barnett, who joined then SDUSD board less then
a year ago, and whose two daughters attend SDUSD high schools.

"The first thing we must do is stop digging a bigger budget hole," said
Barnett. "While it is true the state legislature is not giving our schools
the funding we desperately need, it is also true that our school board has
been spending money we don't have."

Previous Board cut school year and promised raises to kick in next July.

Barnett discussed, how in reaction to the State of California cutting
funds to SDUSD, the previous school board has raided reserves, cut the
school year by Five days, but also promised raises which are
"unaffordable." He also pointed out that the preliminary staff proposal to
avoid mid-year cuts this year and plans for next years budget calls for
reducing reserves $25 million and selling $21 million in district land.

"One-time fixes--to cover ongoing expenditures--such as raiding our
precious reserves (and proposals to sell our land assets) is one of the
reasons our credit rating was recently downgraded," said Barnett.
Moody's Investor Services last week downgraded SDUSD Credit Rating

"We are at the edge of a cliff, said Barnett. "If we don't start acting
prudently now, it may be too late to save our district from insolvency and
state take over."

Three year "Plan to Save Our Schools" has the following elements:
€ Maintain current reserve levels.
€ School closures not required.
€ No land sales.
€ Maintain current class sizes. (Note: if full mid-year cuts are triggered
by State in January, class size increases will likely be required in K-3
to balance budget and avoid insolvency.)
€ Maintain current level of visual and performing arts and athletic
€ Maintain current level of custodial, landscaping, and other classified
€ No further cuts to nurse and counselor staffing levels.
€ Maintain school police at current level

Ongoing costs contained in plan

€ Increase school year by 5 days as currently planned starting September

€ Ending these "furlough days" will cost approximately $17 million.

€ Maintain negotiated "step and column" employee raises. Cost:
Approximately $12 million. (Both of these costs are already counted in
anticipated budget shortfall of $60 million for 12-13.)
Savings and Revenues

€ Eliminate proposed pay raises. Saves $21 million in 12-13. $22 million
in 13-14. $43 million ongoing costs saved.

€ Restructure health plans to save $12 million annually. (Currently all
district employees and dependents get a variety of health care options
with no premiums charged. Healthcare costs SDUSD about $165 million a
year. This proposal would modify the benefit so all employees and
dependents still could get FREE Kaiser, but would have to pay for any
additional costs if they select other health plan providers. This would
save SDUSD approximately $12 million a year.)

€ 10% pay cut starting July 1, 2012 for all employees would save
approximately $60 million a year. (10% cut would be AFTER restoration of
furlough days and after payment of step and column raises. Plan would also
have a sliding scale, where employees earning over $150,000 would be cut
more then 10% and the % cut in salary would be reduced at reduced salary

Possible sliding scale would have smaller pay cuts at these thresholds:
€ $100- $150,000;

€ $75-$100,000;

€ $50-$75,000;

€ $25-$50,000;

€ NO PAY CUT for SDUSD employees earning $25,000 or less.

€ $18,000 School Board to take 10% cut

"Instituting the pay cuts after the salary increases occur from ending
furlough days, and after the payment of "step and column" pay increases,
as well as having a sliding scale which reduces the burden at lower
salaries (with no pay cut for our lowest earners) makes this plan a bit
more palatable," said Barnett.

Unions must agree to concessions by end of calendar year in order to
effectively implement plan.

"Eliminating $21 million in raises, and implementing $60 million pay cuts,
and saving $12 million in health care costs, will require our public
employee unions to approve this plan by end of year," said Barnett. "If
this plan is not in place and mid year cuts are triggered, then it may be
too late to avoid intervention by the state."

New revenue

€ November 2012 -- $50 per parcel tax to raise $60 million a year and
restore cut salaries.

"I know this plan to save our school district places a terrible burden on
our teachers and other employees. But the pay cut must be agree to be
implemented starting July 2012 in order to balance our budget and get the
necessary short-term loans to meet our approximately $80 million a month
payroll and other costs," said Barnett, who headed of the San Diego County
Taxpayers Association for 7 years. "I will urge my colleagues to place a
parcel tax on the November ballot, and will ask voters to support this
ballot measure, which could end employee pay cuts after only 6 months,"
said Barnett.

"I know this plan has something for everyone to dislike," said Barnett.
"Employees will bear the terrible burden of a pay cut, and taxpayers will
be asked to dig in their pockets. But this plan saves our district from
insolvency and state take over. And it maintains our most important
educational programs, while protecting our reserves and our assets from

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