Arbitrator Paul Staudohor ruled this month that the San Jose Unified School District must pay its employees a 6.1-percent raise it had deferred this year because of its serious financial problems--plus an additional 7 percent in interest on the amount of the raise.
After learning of the ruling, Superintendent of Schools Lillian C. Barna said her district would now have to choose between a series of extreme options, including declaring bankruptcy, closing the schools two weeks early, or issuing iou’s to employees because it does not have the money in its budget.
The raises amount to $3.4 million. Ms. Barna said the 7-percent interest would increase that amount by approximately $245,000.
“I wasn’t surprised at the part that said we owe it,” she said, “because there was a contractual agreement. But the remedy we were hoping for was [that] the arbitrator would say, ‘get back to the table and work out a mutually agreeable settlement,’ because the district is broke and can’t pay it.
“Instead,” Ms. Barna added, “the arbitrator has exacerbated the situation by not only saying we should pay the money but [by adding] on top of that a 7-percent interest which increases our debt.” She said she believed the decision takes away the option she had preferred--persuading employees in negotiations to forgo raises. Of the $3.4 million in raises promised this year, $3.1 million was earmarked for 1,400 teachers; 800 school aides were to get $300,000.
However, the district deferred this year’s payment to the teachers and aides because the money was not available and programs had already been cut as much as they could be, according to officials. The employee unions banded together to challenge the district’s deferment. Their action led to the arbitration.
Belinda Hall, president of the San Jose Classroom Teachers Association, said prior to the ruling that her organization might be willing to negotiate trade-offs to defer payment of the raises.
But Ms. Hall said her organization would prefer closing schools early and making it clear to the public and the California legislature the 30,000-student school district is in deep financial trouble.
In recent years, the district has cut hundreds of employees, closed 10 of its 52 schools, and eliminated all 52 counseling positions to balance its budget. Its fiscal problems are attributed by officials in part to declining enrollment and the tax cuts mandated by Proposition 13 in 1978.
Two years ago, the district experienced a bitter 11-day teachers’ strike. It culminated in a three-year contract calling for the 6.1-percent raise that was deferred this year and a 6-percent raise next year.
Ms. Barna said the district’s five-member board of education will have to decide which of the alternatives she has outlined to choose. She said last week that she had not yet decided which course she will recommend. The board was scheduled to take up the issue at a meeting late last week.
Observers say it is possible that the school district will simply ignore the arbitration ruling and plan for a court battle, which would probably not be resolved until next year.
Majorie Ott, a field representative for the California State Employees Association, which represents the school aides, said the arbitration ruling “maintains the integrity of the contract.”
“If we had gotten an unfavorable award,” she added, “it would [have] put us in the position of negotiating with employers and their being able to change their minds later on what they had agreed upon.”
San Jose teachers, whose average salary is $30,000 a year, are the best paid among the large school districts in California.
