The board’s action was influenced by the district’s bleak budget outlook, which will likely not improve unless teachers agree to flexibility in their salaries and benefits, Escalante said.
Glendale Unified spends 90% of its budget on employee salaries and benefits, and with increasing health insurance expenses, the district’s current full-coverage plan is becoming unsustainable, he said.
“We’re not going to be on cruise control,” Escalante said.
“We can’t do it anymore because that’s the reason for our structural deficit.”
Although the district had more money left over from the 2008-09 academic year than anticipated, it is approaching a “funding cliff” that could leave it facing a $20-million shortfall by 2012, Chief Business and Financial Officer Eva Rae Lueck said.
The district ended up with $36.7 million in its accounts after the Legislature failed to approve Gov. Arnold Schwarzenegger’s proposals for budget cuts before June 30, the end of the fiscal year.
But instead of receiving a $5.7-million cut at the end of 2008-09, the district lost $6.44 million when state officials approved a set of amendments to California’s strained budget, Lueck said.
The cuts will combine with other reductions in funding that have shrunk the district’s income levels to below their marks in 2005-06, Lueck said.
While the district will receive $2.9 million less than it did in that year, its expenses related to employee compensation will be $28.8 million more than they were at that time because of rising employee salary and health benefit costs, Lueck said.
