The choice voters make on Proposition 30 will come at a cost to Manteca Unified.
If voters approve Gov. Jerry Brown’s temporary half cent sales tax in conjunction with tax hikes on incomes above $250,000, the school district that serves 23,000 students will get hit with a $1.5 million annual cut in state funding.
If voters reject the measure, it will mean a $10.5 million yearly reduction in state funds. And it could also send the district to the edge of bankruptcy within two years.
Those aren’t scare tactics. They are the best case scenarios for Manteca Unified in a Nov. 6 election that is considered make or break for education in California after five years of consecutive funding cuts.
“Education is what we are about and it is our main job,” Superintendent Jason Messer noted.
Messer said, though, that right behind it comes the welfare of the district’s employees who are essential to the education process.
Teachers and support staff have not had a pay raise in five years. They are paying more for health benefits and share retirement contributions with the district. In terms of what staff has given up, the reduction in compensation is pushing double digits since the state budget crisis started in earnest in 2007. And even though they have access to health benefits, many of the plans that staff opts for have $2,000 deductibles.
The only way the district could come up with $10.5 million in cuts would be to lop 15 days of instruction off the yearly instructional calendar. Students now attend school for 175 days. That would drop down to 160 days to keep the district from running out of cash.
And as Messer pointed out, that can’t be accomplished without contracts being reopened due to the state collective bargaining law districts must operate under. Messer noted the teachers group has indicated they would be willing to reopen contract talks should Proposition 30 fail but that in no way obligates the teachers to do anything.
More cuts will force some employees to the brink
“We have employees who - if further cuts are made in their pay - will have to decide between paying for health care benefits (premiums) and their mortgages,” Messer said.
Already in several cases support staff that works a full eight hours and take benefits, take home less than a co-worker employed six hours a day due to the premiums.
The impact of what would essentially be almost a 10 percent pay cut in compensation for district employees and would be felt throughout the community.
Messer noted Manteca Unified is the largest employer in the South County with just over 2,000 employees.
Manteca Unified is now operating on $150 million a year after sustaining accumulative cuts of 22 percent since 2007. The district started the current year with $4.3 million cash on hand and $35 million on paper.
That $35 million on paper is money the state owes Manteca Unified that they were able to defer through a series of budget maneuvers that critics describe as “smoke and mirrors” over the years. Even though the district leadership believes the odds of that money ever making its way to the district is close to zilch, it does help the district meet another state mandate of being able to show they can balance the budget three years out. Essentially the budget three years out is being balanced using money the state owes Manteca Unified but doesn’t exist and perhaps never will.
“It’s no better than Monopoly money,” Messer said of the $35 million.
Should Proposition 30 pass, it essentially will enable the state to pay part of the money that they already promised that they would provide school districts.
And since funding currently isn’t that solid, Messer said instead of giving pay raises when additional funds become available, he’d recommend the board use available “new” money to provide what would essentially be “bonuses” until such time as finances stabilized. That way additional compensation wouldn’t be recurring. Messer noted that ideally the district would like to be in a position to give pay raises since staff has gone five years without pay raises as well as taking compensation cuts. But he noted it would be too risky to obligate the district for reoccurring increased costs until such time the budget crisis stabilizes.
There is a competing initiative on the ballot that addresses school funding, Molly Munger’s Proposition 38.
Messer said the district hasn’t devised scenarios using that tax measure for two reasons - it taxes everyone so it’s less likely to pass and if it does pass along with the Brown backed measure educators are betting that the courts would side with the measure embraced by the governor and California Legislature.,
Proposition 38 in its first two years would assure that 60 percent of the revenue generated receive from increased taxes would go to schools, 30 percent to repaying state debt, and 10 percent to early childhood programs.
It would tax all annual earnings over $7,316 on a sliding scale from 0.4 percent on the lower end to 2.2 percent on those making more than $2.5 million a year. The tax would sunset in 12 years.
Failing to pass Prop. 30 would create financial problems
Should Proposition 30 pass, Manteca Unified’s cash situation would be strong enough as things currently stand to stay away from the financial abyss.
If it fails, the district could be facing severe financial problems by 2014.
Even so the district is in better shape than many others throughout the state. That’s because, Messer noted, the Manteca school board directed staff when the budget crisis first hit to make cuts and not gamble on a subsequent year getting better. By reducing expenses and controlling costs early, the district in many instances has been able to enjoy the multiplier factor on savings. A $10,000 expenditure limited five years ago has the net savings impact today of $50,000.
“Our school board has taken a very conservative approach,” Messer noted.
Messer, though, cautioned against any direct comparisons between other districts such as Stockton Unified that appear to be in a more precarious financial position. That’s because every district’s finances are different based on demographics and other factors that impact state and federal funding.