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Published in Print: March 19, 2008, as Layoffs Loom Amid California’s Fiscal Crisis
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Layoffs Loom Amid California’s Fiscal Crisis

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Thousands of layoff notices are expected to go out across California this week as school districts began to brace for cuts in next year’s budget, amid the state’s worst fiscal crisis since the 2003-04 school year.

The California Teachers Association estimates that more than 14,000 teachers alone have received “pink slips” because of an expected deficit of more than $16 billion in the fiscal 2009 state budget.

While the state education department doesn’t track such potential layoff numbers, Carol Bingham, the director of the department’s fiscal-policy division, said the “flurry of activity” was due to a state law that requires districts to notify certified employees by March 15 if they will not have a job in the next school year.

Though many of the teachers receiving the notices may end up being spared when the final deadline to notify teachers comes in May, the volume of layoff notices is a sign of how deeply California’s budget woes could end up affecting K-12 education if lawmakers fail to come up with alternative solutions.

Just last month, the legislature—meeting in a special emergency session called by Gov. Arnold Schwarzenegger—approved roughly $1 billion in cuts to the current state budget of more than $103 billion.

About $500 million of those fiscal 2008 cuts came from the education budget, but Ms. Bingham said most of that amount was taken from unspent funds and would not have a direct, immediate effect on school districts.

What is likely to have a greater impact, however, is a provision signed by the governor Feb. 16 that will delay until September payments that districts normally receive from the state in July. The decision is intended to improve cash flow for the state during the summer months, but Ms. Bingham said that many districts may have to borrow money to cover expenses in the meantime.

Some school systems across the state, including the 55,000-student San Francisco Unified School District, are already planning to ask voters to approve parcel taxes this spring to continue support for a variety of education services—from library services, to classroom maintenance, to protection of low pupil-teacher ratios.

Unlike property taxes, which are based on assessed value, parcel taxes are flat fees charged to property owners. Parcel-tax votes have tended to be more successful in higher-income regions of the state, such as the San Francisco Bay Area.

Cuts in Other States

California is not the only state where schools districts are weighing reductions to education services as they struggle with a sagging economy and fallout from the home-mortgage crisis.

In Florida, where tax revenues are expected to be about $4 billion less than estimated a year ago, the legislative session began recently with a vote by the House to cut $500 million from the current $70 billion state budget, more than $350 million of which would come from education. Basic per-pupil funding, the state’s voluntary pre-K program, reading programs, and instructional materials are among the areas being targeted for reductions.

“[B]udget cuts that have occurred in the current budget year—and those that are projected for next year's budget—already pose a serious threat to our classrooms and to our children,” said Mark Pudlow, a spokesman for the Florida Education Association, an affiliate of both the National Education Association and the American Federation of Teachers. “We've gone beyond cutting ‘fat.’ We’re seriously cutting into muscle.”

Meanwhile, district leaders there have been pleading for flexibility in the state’s mandatory class-size-reduction program, which fully takes effect later this year. They say there won’t be enough money to hire additional teachers and build classrooms to meet the requirements at the same time they are facing cuts. ("Leaner Class Sizes Add Fiscal Stress to Florida Districts," Feb. 20, 2008.)

In Arizona, the House and the Senate, both controlled by Republicans, approved a $600 million spending freeze to speed up negotiations with Gov. Janet Napolitano and her fellow Democrats. They are trying to close a $1.2 billion deficit in the current budget of $10.6 billion and address an even wider gap—possibly as high as $5 billion—in next year’s budget.

But the governor promptly vetoed the bill. She is proposing to make up part of the deficit by paying for more than $470 million in school construction costs through bonds instead of from the general fund—a recommendation that the Republicans are against.

“It’s crazy to pay cash for buildings,” said Mike Smith, a lobbyist for the Arizona School Administrators Association. He added that at least another 2 percent could be cut from each state department’s budget, but that with only a few months left in the fiscal year, most of the current budget has been spent.

In Michigan, where income- and sales-tax increases were passed last year to help close a $1.8 billion deficit in the fiscal 2008 budget, the state financial picture is actually improving.

The fiscal 2009 budget proposal from Democratic Gov. Jennifer M. Granholm, which she presented last month, seeks a $100 million deposit into a “rainy day” fund, an increase in per-pupil funding, and an expansion of the state’s Great Start preschool program.

Grim Outlook

But in California, state Legislative Analyst Elizabeth Hill has presented an even more grim picture of her state’s fiscal situation than she did earlier this year, and recommended an alternative budget proposal that included even more midyear cuts.

State Superintendent of Public Instruction Jack O’Connell said in a Feb. 20 press release that any suspension of Proposition 98 funding—the finance formula that controls the minimum amount California schools receive—“would result in direct harm to programs critical to closing the achievement gap and preparing all students to succeed in a demanding future.”

Ms. Hill also suggested changes in the state’s tax structure, such as removing certain tax credits and exemptions, that she estimated would add more than $2.5 billion in revenue for fiscal 2009.

But Gov. Schwarzenegger, a Republican, rejected that idea. “I have been very clear in my position against raising taxes to fix Sacramento’s spending problem and our budget,” he said in a press release.

The governor has instead been pushing a constitutional amendment that would require automatic deposits in a rainy-day fund.

In the meantime, school districts themselves are making cuts and feeling the outrage from the state’s education community.

In the 694,000-student Los Angeles Unified district, the school board has already cut $100 million from the fiscal 2008 budget of $13.9 billion and is expecting more than $450 million in cuts from next year’s budget.

“The district is trying to stave off as many cutbacks as possible,” said spokesman Charles Sifuentes, adding that he didn’t know how many teachers would be receiving layoff notices. As in other districts, Mr. Sifuentes said, the board’s strategy has been to “reach out to the public” and direct the criticism back onto the policymakers in Sacramento.

Reacting strongly to the prospect of layoffs, teachers have held rallies in cities such as San Francisco, where about 500 teachers were expected to receive layoff notices.

In the 10,000-student Alameda Unified district, near Oakland, elementary school students walked out of classes two weeks ago to protest $2.5 million in cuts approved by the school board.

Mr. O’Connell met with students March 7 to discourage them, and others across the state, from expressing themselves in a similar way in the future.

“This budget puts districts and schools in a terrible bind and threatens to undermine the highest-quality education California’s 6.3 million students deserve,” the superintendent told them. “At the same time, I urge all California students—no matter how unjust or wrong they think these cuts are—to stay in school.”

Layoffs, others say, also interrupt any progress the state was making toward improving the quality of the teacher workforce.

According to a report released this month by the Santa Cruz, Calif.-based Center for the Future of Teaching and Learning, the number of students entering teacher-preparation programs in the state dropped after the last budget crisis in 2003 and hasn’t fully bounced back.

“These threats of layoffs are not only harmful to the morale of local school personnel, they also greatly complicate the challenge school districts face in retaining veteran staff and planning for the hiring and assignment of new teachers to meet student needs,” says the organization’s report.

Vol. 27, Issue 28, Pages 14,17

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