It’s been a rough year for the K-12 Santa Barbara school system financially, but it doesn’t appear that exorbitant spending on the health benefits, pensions and salaries of its employees is to blame. At least not in comparison to other California school districts, according to information from School Services of California, a Sacramento-based school consulting firm.
On health benefits, for example, the Santa Barbara School District’s per-employee expense is far below the statewide average. Pension expenses are proportionally identical at every district in California, although the statewide pension program is becoming a major problem unto itself. On salaries, the share of the district’s budget spent on administrative salaries is firmly lower than the state average, and teachers tend to earn salaries about on par with state averages.
So what went wrong? After all, the school board last month cut $6 million from its $119 general fund — that’s 5 percent of the total discretionary budget — and sent layoff notices to 45 teachers and 10 other employees while increasing the size of its classes in the high schools, among other things.
The short answer is that the Santa Barbara district is among the many casualties of California’s budget disaster. However, close followers may note that the district this year went into “basic aid,” which under normal circumstances is euphemistic for “got it made.” Montecito Union School, for instance, is a basic-aid district, and in recent years has enjoyed a budget of $23,000 per child versus the $5,000-per-child allotment to which the vast majority of California districts are entitled. But even though Santa Barbara “went basic aid” this year, it — like many districts in California — is far from made.
This article will address that issue, but first, a word about health benefits, pensions and salaries.
In 2008-09, the latest year for which comparative figures are available, the Santa Barbara school district spent, on average, about $7,500 per employee on health benefits, according to State Services. In Ventura, whose K-12 district is roughly the size of Santa Barbara’s, the district spent about $9,900. Santa Monica-Malibu Unified spent $13,700. Throughout California, the average district spent a little more than $11,900.
The Santa Barbara district’s cost for retiree benefits has indeed risen, to a total cost of about $1.1 million from $677,000 four years ago. But that’s just a fraction of the overall budget.
In terms of total benefits — that is, the figure that combines health, pension, employer payroll taxes and other payroll-related costs — the proportion of the budget spent by Santa Barbrara, 16 percent, again fell below the statewide average of 20.3 percent, according to a 2008-09 School Services study using 2006-07 data.
As for the employees themselves, the rising cost of health care is a problem. Layne Wheeler, president of the Santa Barbara Teachers Association, said the cost increases seem especially pronounced in Santa Barbara. In just one year, for instance, teachers’ co-pay for a colonoscopy at Santa Barbara Cottage Hospital rose to $250 from $50, he said. Meanwhile, the cost of premiums has been increasing by up to 20 percent annually.
“We like the care, we hate the costs,” Wheeler said. “The doctors are high quality, the nurses are high quality, but the cost of staying healthy has increased.”
Since 2008-09, the district has boosted its contribution toward health benefits somewhat, to 7.7 percent of its total budget this year from 6.8 percent. But that’s still well below last year’s state average of 9.2 percent.
It is well known that California’s public pension programs are foundering in the bad economy, which means state taxpayers might have to bail out the funds. Public employees often enjoy solid pension packages, and seasoned teachers and administrators are no exception.
In 2008-09, about 12,700 teachers retired. The average retiree was nearly 62 years old, worked for 29 years and will earn, until death, $4,400 a month, or $52,800 a year, according to the Web site of the California State Teachers’ Retirement System, or CalSTRS, the statewide pension program for teachers. As for administrators, those who retire at 55 after 30 years of service receive 60 percent of their highest salaries, for life. Those who retire at 63 after 40 years receive the full 100 percent, according to the California Public Employees’ Retirement System, or CalPERS, the state pension program for school administrators and other management employees in government.
Statewide, both CalSTRS and CalPERS are hurting. In January, the teachers’ retirement fund — the second largest in the nation — was reporting a $43 billion shortfall. And CalPERS, for administrators, performed even worse than average on the stock market last year. Its portfolio shrank 23.5 percent in the last fiscal year, while the portfolio of the average large pension fund in the United States dropped 18.8 percent, the Los Angeles Times reported last month.
But this is a local issue only inasmuch as local districts suffer when California suffers. The Santa Barbara school district, like every other one in the state, contributes 8.25 percent of every teacher’s salary to CalSTRS. (Teachers contribute an additional 8 percent.) For administrators, the district pays in 9.7 percent.
Teachers in Santa Barbara tend to be paid on par with the statewide average, according to the School Services reports. Teacher salaries in Santa Barbara currently range from about $42,000 to about $80,000, Wheeler said.
In the latest comparative School Services study, which occurred in 2008-09 but used data from 2006-07, the starting salary for Santa Barbara’s teachers — $41,461 — ranked ninth out of 18 similarly sized districts in California. Santa Barbara’s maximum salary at the time — $74,326 — ranked 15th out of 18, but that amount has since gone up, and is probably now closer to average. The best measure for comparing teacher salaries might be to look at midcareer amounts. Earning about $65,593 in 2006-07, Santa Barbara’s midcareer teachers fared slightly above average, ranking seventh out of 18.
The study also took a look at 20-year earnings for teachers. On this measure, Santa Barbara ranked 10 out of 18: the average Santa Barbara teacher makes a total of about $1.2 million during the 20-year period.
Faring below statewide averages was the share of the district’s total budget dedicated to janitors, cafeteria workers, secretaries and other employees who fall under the category known as “classified.” The Santa Barbara district spent about 11.2 percent of its budget on this group, compared to a statewide average of 12.6 percent.
Similarly, Noozhawk reported earlier this year that the district in 2008-09 spent a smaller-than-average portion of its general fund on administrative salaries — 6 percent, compared to a statewide average of 7.2 percent. In comparison to Ventura, which serves 17,000 students to Santa Barbara’s 16,000, Santa Barbara has fewer administrators per capita. In Ventura, 5.9 percent of the 1,844 employees are administrators; in Santa Barbara, 3.4 percent of the 1,637 employees are administrators.
Basic Aid Isn’t a Cure-All
When a district goes into “basic aid,” it means it generally makes enough in property taxes to cover its own expenses without help from the state. These lucky districts, which account for about 5 percent or 6 percent of all districts in California, also get to keep the spillover.
But in Santa Barbara, which went into basic aid this school year, there was certainly no such spillover. What’s more, proceeds from property taxes in Santa Barbara were essentially flat from the year before, said Eric Smith, the district’s deputy superintendent. What did change was the minimum per-child allocation for every district in California, as set forth by state law. Thanks to the California budget fiasco, that amount has plunged nearly 20 percent in just two years, to a little less than $5,000 per student from $5,550 in elementary schools. (The amount for secondary schools is slightly higher.) That means it’s easier for Santa Barbara’s property taxes to cover it all. The problem is, the minimum-per-child amount is no longer enough to cover the district’s expenses. Hence the budget bloodbath in late February.
“We’ve been deficited or cut into basic aid,” Smith told Noozhawk. “For us, being in basic aid is not a panacea because of the way we got here.”
However, if enrollment continues to shrink — as it has been doing consistently — and if proceeds from property taxes hold steady or increase, Santa Barbara schools should eventually reach a place of financial stability, and may even become relatively flush, like its neighbors in Montecito and in the Goleta Union School District. In essence, this is because the district would have the same amount of money or more every year to serve fewer and fewer students. In five years, the number of students in the district has shrunk by a little more than 1,000, to 14,335 this year. (For the purposes of calcuating budget information, this amount excludes the number of students attending the district’s three charter schools, which enroll a total of about 1,200 students.)
Without question, the Santa Barbara school district will have fewer services next year. This fall students and educators will make do with dozens of fewer teachers, larger class sizes, fewer school psychologists and significantly less money for athletic trainers and routine classroom maintenance, to name a few things.
But Smith said on this front, Santa Barbara still fares better than many.
“(The massive cut) is not unique to Santa Barbara,” he said. “If anything, we have a whole bunch of things other districts have cut. Most districts do not have (teacher) certificated librarians or certificated nurses. … Many districts have raised class sizes to 40 students in the secondary and 30 in K-through-6.”
In Santa Barbara, class sizes in the secondary district will increase this fall to an average of either 32 or 34, depending on the school, up from current class sizes, which generally range between 25 and 30. In 2008-09, meanwhile, the School Services study found that average class sizes in all Santa Barbara schools hovered around 25, compared to a statewide average of around 26.
In general, it appears Santa Barbara tends to spend a little less on its employees than the statewide average, and as a result has a little more for the students than it otherwise might.
“When employees have the best working conditions and the highest compensation, it is predictable that they will have fewer programs and support for students—the pot is only so big,” Suzanne Speck, School Services’ director of management consulting, told Noozhawk in an e-mail.
“Trying to maintain the best programs for students, the best working conditions, and the highest compensation for employees is a recipe for financial disaster.”
— Noozhawk staff writer Rob Kuznia can be reached at firstname.lastname@example.org.