Insolvency 101: Sacramento teachers, you better add this to your lesson plan

Any discussion about education must begin like this: Teachers don’t make enough money and that could probably be said for teachers in any school district in America.

That sentiment has moved thousands of people in Los Angeles and Oakland to rally around public school teachers when they decided to go on strike recently. Hollywood movie stars stood in solidarity with L.A. teachers during their strike in January and opportunistic politicians such as U.S. Sen. Kamala Harris tweeted their support for teachers. East Bay residents strongly supported Oakland teachers when they went on strike in February.

Well, now we’re in March and public school teachers in Sacramento are making serious noises about going on strike, just 18 months after the last time they threatened to go on strike. That time, in the fall of 2017, the Sacramento City Teachers Association secured raises amounting to 11 percent increases for many teachers. That deal was brokered by Sacramento Mayor Darrell Steinberg.

Do the teachers deserve even more? Of course they do. But the situation in Sacramento is far more complicated than the simple question of whether teachers should make more. The depth of the financial peril facing the Sacramento City Unified School District cannot be distilled to a tweet or a sound bite. Decades of bad decisions and dysfunctional relationships between the district and the SCTA have led us here.

That teachers are talking about going on strike right now when the district is facing insolvency within a matter of month is a crisis. This is a crisis caused by adults who claim to love kids but who will hurt kids and teachers and counselors and principals – and the economy and reputation of Sacramento – if the local district must be bailed out by the state.


If the district and SCTA fail to cut a deal by the end of the current school year, the district will likely run out of money in November. If that happens, then the district loses local control of its schools.

The members of Sacramento’s elected school board will be essentially shoved aside in favor of an appointed administrator whose primary priority will be to make certain the district pays back the state’s loan in a timely fashion.

The district could take more than a decade to do that. That would be a serious political setback for Steinberg. Sacramento’s efforts to sell itself as a place for companies to invest would be damaged because a major selling point is good schools. How many investment opportunities would be lost if Sacramento became known as the city whose schools were bankrupt?

Frankly, business leaders such as Barry Broome of the Greater Sacramento Economic Council should step in and ask, ‘What the hell is going on here?’ And where is the Sacramento Chamber of Commerce? The Downtown Partnership? The Sacramento Kings and other major employers?

The Greater Sacramento Urban League, the NAACP and Black Lives Matter have every right to be even more forceful than the measured tone they’ve taken publicly on the school district crisis so far.

The same goes for the Sacramento Hispanic Chamber of Commerce, Area Congregations Together, the Sacramento Latino Community Roundtable, and every African American, Latino and Asian activist in the city. More than 70 percent of Sac City Unified students qualify for reduced or free lunches. With the exception of wealthy enclaves in Pocket/Greenhaven, Land Park, East Sacramento and others, Sac City Unified is where the next generation of Sacramento’s kids of color are being prepared for college and to enter the workforce.

If Sacramento can’t see a broader picture of an already strapped district forced to jettison programs that kids need, here is what will happen: Those privileged enough to live in gracious neighborhoods will simply open their wallets to make up for the shortfalls caused by district insolvency. But more humble kids will do without. They are the ones who will suffer.

The district already falls far short of providing educational equity for all its students. In 2018, the district found that only a small percentage of its overall student population qualified for its most rigorous learning programs, such as the Humanities and International Studies Program at C.K. McClatchy High School. Of 3,000 9th-graders in the district in 2018, only 207 qualified for HISP.

No wonder Sac City’s elite programs are seriously lacking in diversity. We have a two-tired system of haves and have-nots in Sacramento public schools. We are facing insolvency and teachers are talking about going on strike 18 months after getting 11 percent raises.

Getting educated on the difference between fact and fiction in the district is difficult because of years of bad blood that predates the current superintendent, Jorge Aguilar. He arrived in the summer of 2017 when the war drums for a strike were already beating. The district was already in mediation with teachers when Aguilar walked through the door.

Aguilar, the son of Mexican farmworkers, acknowledges now that he had no idea how steep of a mountain he needed to climb to make Sac City run right.

Aguilar is a champion for equity. He thinks all students should have the same opportunities regardless of their ZIP codes or stations in life. But what he didn’t know is that he was inheriting a district where 91 percent of its general fund goes to salary and benefits.

Let’s repeat that: 91 cents of every dollar in Sac City goes to salary and benefits.

The industry standard in education is 85 percent going to salary and benefits, according to the Sacramento County Office of Education. Sac City has been at 91 percent since 2006. In all those years, the district essentially disregarded repeated warnings by the county superintendent.

Those warnings that went like this: What you’re doing is not sustainable. Even in good times, health care costs are skyrocketing, so you will never catch up or take advantage of increased revenues because so much of your general fund is wrapped up in salary and benefits.

In 2006, the district paid $86 million for the benefits of all employees. In the last fiscal year, that figure had risen to $168 million. According to the Fiscal Management Crisis Assistance Team, an independent state agency that supports public school districts in crisis, Sac City Unified pays more in health benefits to employees than any other school district in the region by far.

Aguilar does not want to ask for a taxpayer bailout, as the Los Angeles Unified School District is contemplating doing after giving its teachers raises to settle January’s strike. He doesn’t want to cut $20 million out of programs, as Oakland schools are doing after giving teachers raises last month.

He wants to find savings in employee health benefits that would be the centerpiece of a plan to plug an expected $35 million deficit the district is facing – a deficit that would trigger insolvency if it’s not plugged by the end of school year.

The hope is that such savings would bring Sac City pay and benefits in line with industry standards. If that happened, Aguilar thinks the district would be in much stronger position to ask taxpayers for help.

What’s happening instead? Teachers have authorized a strike vote. The SCTA wonders what happened to a surplus the district had when Aguilar walked in the door. The SCTA thinks that Aguilar’s administration is bloated. The SCTA is painting Aguilar as the problem to its member teachers.

OK, so instead of the back and forth, an independent third party – the Sacramento County Office of Education – warned the district after it cut a deal with Steinberg that trouble lay ahead. Dave Gordon, the superintendent of county public schools, said at the time that district would be in danger of insolvency unless deep budget cuts were made to offset teacher raises.

What about district bloat? According to a FCMAT analysis, Sac City has among the lowest administrative costs in the region. Natomas, Twin Rivers, Lodi, Davis and Elk Grove all have higher administration costs than Sac City, according to FCMAT.

The SCTA is painting Aguilar as the enemy, but reviews by FCMAT and SCOE both point to huge funding mistakes made by his predecessors. The other four labor unions have lined up with Aguilar.

All that is left our teachers. The clock is ticking. Does Sacramento care enough about public education to save it?