San Diego School District's Budget Gap Now $48.4 Million

More Spending Cuts Might Be Needed

The massive budget deficit hanging over the San Diego Unified School District in the next academic year has been narrowed by two-thirds, meaning the school board will need to make further spending cuts in coming months, district officials said Tuesday.

The deficit in the $1.2 billion general fund for 2009-10 school year was originally estimated to be $146 million. Between spending cuts already approved by the board, budget flexibility allowed by the state and stimulus funds, the shortfall has been reduced to $48.4 million, according to Superintendent Terry Grier and Chief Financial Officer James Masias.

The two, who presented the status of the district's finances at a special morning board meeting, said the deficit figure might drop by several million dollars later this month, depending on a number of factors, including whether teachers' unions agree on larger class sizes.

"We'll continue to see additional savings," Grier told board members.

The largest single expense category, teachers' salaries, is currently pegged at $605.4 million. That number will be lowered if the union agrees to having more students in a class and if more teachers accept the district's buyout offer, according to Grier.

So far, 591 teachers have accepted early retirement, about 27 percent of those eligible. The district plans to replace each of them with younger, lower-salaried instructors, at a savings next year of about $6 million.

In an effort to get teachers to sign up for early retirement, the board approved a two-week extension of the offer.

In all, 76 of the more than 1,000 employees taking part in the buyout program won't be replaced, for a savings of $8.9 million in 2009-10, according to district figures. None of the 76 are teaching positions.

Board member Richard Evans called the retirement program "the whole middle piece between revenues and budget cuts."

Among the options for closing the remaining $48.4 million gap are reductions in the use of certain block grant funds, continued reorganization of the district's central office, and a four-day furlough for all classified employees except bus drivers.

The district's financial picture will also be altered by Gov. Arnold Schwarzenegger's latest projections -- to be announced Thursday -- and the results of next week's special election on state budget propositions.