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George Neely Lodi Unified School District has much at stake on November ballot

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George Neely

George Neely, Lodi Unified School District trustee

“It’s a misconception that we can’t get rid of a teacher who’s not performing. If we’re having a problem with a teacher, there are ways we have dealt with that in the past.”

George Neely, Lodi Unified School District

“I don’t think there was anybody there who didn’t want to bring graduations back, but there are physical limitations.”

George Neely

Age: 61.

Occupation: Director at ABLE Academy.

Family: Married 18 years in second marriage, with two sons from a previous marriage.

Community activities: Board of trustees for GOT Kids Foundation; former member of the Lodi Public Library board; enrolled in night school to get his administrative credential.

Posted: Tuesday, October 9, 2012 12:00 am | Updated: 6:43 am, Wed Oct 22, 2014.

In November, California voters will make a choice that could substantially impact the funding of our schools. Propositions 30 and 38 both increase revenues by raising taxes and promise to fend off further budget cuts to education.

I will not go into the details of the propositions, as much has been written about that already. However, I would like to shed some light on the current situation at Lodi Unified and the potential impact of the propositions here at home.

If there are no further cuts to the state budget after the November election, Lodi Unified should get about $214 million in revenue for the current fiscal year. Of that amount, 92 percent will come from state and local taxes and other 8 percent from the federal government. This is a decrease of the about $28 million, or about 12 percent, over the last four years.

The biggest part of our state revenue is based on our Average Daily Attendance, or ADA. The more students that attend school, the more money we receive. On the surface that sounds like a good idea, but in practice it causes a lot of problems.

There are currently about 28,500 students attending Lodi Unified schools, and we have over 50 schools. Current funding is about $5,000 per student. Let's say that we had a decline of 200 students spread out over the district (we have had much greater drops than that recently, but round numbers are easier to work with). That means we would lose $1 million in state funds. However, the cost of running the schools would remain almost the same. A decline of a few students per school site does not reduce our fixed cost. We still need the same number of teachers and other staff. We still have to light, heat and cool the classrooms. We still have to provide all the same services, but with substantially less money.

Where does our money go? Our biggest expense by far is personnel, which in the current year is about 81 percent of our total expenses. This covers all salaries and benefits for the entire district. We budget about 10 percent for books and supplies, and about 9 percent for contracted services. The category of "contracted services" covers everything from copier leases to alarm monitoring and much, much more.

If you look at our latest amended budget, you will see that Lodi Unified shows a healthy reserve of about $52 million. Part of the money is held in reserve for known future major expenses facing the district, and part it is held due to the uncertainty of the state's fiscal situation.

Sounds great, doesn't it? The problem is that we don't really have that as cash. Most of it is the form of IOUs from the state. This is one of those "smoke and mirrors" moves by our state government to make it look like they're funding education while balancing the budget. What they actually do is move a portion of the money schools are allocated for the current year into the next fiscal year. So, not only did the state cut funding to our schools, but some of the money they allocated to us doesn't come until the next year.

Apparently our legislature likes this particular tactic, as they have repeated the process several times. They are now in debt to Lodi Unified for over $40 million. This means that in order to meet our obligations in a timely manner, we must borrow against the IOUs. The interest we pay on that money comes from our general fund, and last year it amounted to about $500,000.

The bright side to having this large reserve (even built on the IOUs) is that, unlike many other districts in our area, Lodi Unified was able to avoid layoffs this year. That is a big deal. In addition to the educational and personnel benefits of keeping our people in their jobs, we didn't have to waste money on the layoff process or the inevitable attorney fees associated with layoffs. The estimated savings here is about $350,000.

Another advantage is that, regardless of the outcome of the November ballot measures, Lodi Unified will be able to make it through the current school year. However, what next year holds for this district is dependent on November's ballot.

If Prop. 30 does not pass, Governor Brown and the legislature will cut education funds. This cut will translate to about $12 million for Lodi Unified. It will be effective for the current school year and, in all likelihood, continue into next year as well. Our reserve will be slashed this year, gone next, and we will be in the red on the third. The significance of this is that a school district risks intervention by the county and the state into their management if they cannot show three years worth of a stable budget.

We also need to understand that if Prop. 30 does pass, Lodi Unified will not receive additional funding. Any extra revenue generated from Prop. 30 will be used to pay some of the massive debt owed to schools. That only means that we will be forced to borrow a little less.

The other measure on the ballot, Prop. 38, calls for higher income tax hikes and targets money to specific areas of education. The problem is that, even though it directs money to schools, the legislature can reduce other sources of school funding, thus wiping out any gains.

So here are my thoughts on the situation: No one likes or wants a tax hike, but the impact of another $12 million cut from our district's budget is unacceptable.

The impact will also be felt in our community. Lodi Unified is the largest employer in this area, and with 81 percent of our budget going to personnel, we know it will not be possible to achieve cuts of that magnitude without cutting payroll. A reduced payroll to our employees means fewer purchases on the local economy. It means fewer dinners out or trips to the movies for LUSD employees and/or employees that have been let go.

I understand the reluctance of some to vote to raise taxes. I respect philosophical differences of opinion on this issue, but I sincerely believe that the alternative is far worse. Lodi Unified has already absorbed over $28 million in funding cuts in a short time. The possibility of a retroactive cut of $12 million and the momentous consequences it brings must transcend those philosophical differences.

George Neely is a Lodi Unified School District trustee.

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Welcome to the discussion.


  • Joanne Bobin posted at 12:47 pm on Sat, Oct 13, 2012.

    Joanne Bobin Posts: 4488

    When my husband worked for LUSD back in 1997, my health plan at a local HMO cost me $35 per month for our family - the enrire premium was around $450/month.

    My husband took a $125/month "rebate" which is REQUIRED in order for an employer to offer a Section 125 Cafeteria Plan. That requirement may have changed in the Tax Code - I'm not aware if it has, but I am aware that many employers who offer a Sec. 125 "omit" the rebate, either out of ignorance or on purpose.

    That rebate - the "hundreds of dollars," as you describe it, saves the District THOUSANDS OF DOLLARS in premiums and potential increases caused by really sick participants.

    And I am surprised that YOU were allowed to attend and "participate" in union meetings. That was prohibited when my husband was a member and officer of LEA. Things change, I guess.

  • Darrell Baumbach posted at 5:57 pm on Wed, Oct 10, 2012.

    Darrell Baumbach Posts: 9405

    Jason stated...great deal of us teachers do not have any of the "benefits" in which you keep referring to

    If I remember, the last meeting I went to had a document that stated around 235 teachers opted out of benefits and received a cash increase of hundreds of dollars as a result. I am fuzzy on the details. Am I close?

  • Darrell Baumbach posted at 5:52 pm on Wed, Oct 10, 2012.

    Darrell Baumbach Posts: 9405

    Jason, Im sorry, but Im not sure you have the ability to comprehend the value of what teachers have.

    My wife taught for 25 years prior to her retirement. I went to many union meetings and observed, listened and participated in the process. I attended STRS educational meetings. I followed my wife's salary and increases from beginning to end. I followed the benefits package year after year and know that the value of what is offered as a package is superior to any package offered in the private sector. I also attended her retirement meeting and saw all the options available and appreciated the pension as it is far better than what I can get from Social Security.

    The premiums you are asked to pay is a fraction of what the actual costs are. My wife worked until two years ago when we were paying close to $400.00 per month for the low option HMO which was superior to anything one could buy on the market.The value of that benefit package was close to $3000 per month or more, so $400.00 was more than fair. It was generous.

    I appreciate your post and think you are a fair minded person. I am simply attempting to bring a sense of reality to what is communicated.

  • Jason Johnson posted at 11:40 am on Wed, Oct 10, 2012.

    Jason Johnson Posts: 10

    Mr. Baumbach, Please understand that a great deal of us teachers do not have any of the "benefits" in which you keep referring to. The cost of health care has risen so sharply that many of us have told the district, “no thank you.” By accepting the benefits package, some of us would have to pay an additional 500-700 dollars out of pocket per month. We have sought out medical insurance through other means (our spouses, for example – which mine does work in the private sector and does have a family plan). Please feel free to look at the salary and “benefits” schedule – they are available online. I assure you they are very humble. Some teachers are paid as little as $35,000 per year – nobody is getting rich off of your tax money by those numbers. I’ll come back to a statement I made to you a couple of years ago: you pay your babysitter $4 per hour, per child; I think many teachers would take that kind of money any day!

  • Darrell Baumbach posted at 8:50 am on Wed, Oct 10, 2012.

    Darrell Baumbach Posts: 9405

    Mr Johnson stated...And we made the concessions because we understand the reality of the economy

    Obviously, you did not understand the reality of the economy.

    As George Neely stated well in this letter, If Prop. 30 does not pass, Governor Brown and the legislature will cut education funds. This cut will translate to about $12 million for Lodi Unified. It will be effective for the current school year and, in all likelihood, continue into next year as well..

    This means the 2% cut was far from appropriate considering the reality of our economy... In the private sector, if a business does not have revenue, it takes actions to increase profits of cut expenses or both... the reality is, a 12-17 % real cut was in order to help our economy.

    The school district and teachers are being selfish. Do you understand that most businesses only pay benefits for the employee and nothing to insure dependents. Do you understand how many millions of dollars are spent insuring dependents of educators. If the district could reduce its expenses like the private sector, the entire economic problem goes away without a salary reduction. If you consider a reduction in benefits as a salary deduction, then you should also include the value of benefits as a salary increase.

    In fact, if you did include the value of the increase in benefits cost factors , the 2% pay cut was actually not real, in fact, teachers got a pay raise.

  • Darrell Baumbach posted at 8:35 am on Wed, Oct 10, 2012.

    Darrell Baumbach Posts: 9405

    Thank you for articulating how far out of reality the thinking some of our educators are. You got a 2% pay cut..thats it. If you add in the economic value of the benefit package to the salary, the 2% perceptage goes down as I remember the salary deductions for the health dental and vision went down a little.

    In plain English, teachers were given 7 days of unpaid vacation. That is seven less days that students have to gain knowledge and experience that they so obviously need.

    Had I been a teacher, I would have been angry at my union for suggesting I accept more vacation days. Instead, I would have preferred to have a straight 7% pay cut and work the same number of days. That way, my students who need my help can get it. Instead, I see these vacation days as substantiation that some teachers value their pay check more than their students.

  • Jason Johnson posted at 11:35 pm on Tue, Oct 9, 2012.

    Jason Johnson Posts: 10

    @ Darrell – unfortunately you statistics are a bit misleading. Yes, the furlough days were a part of the cut. Let me explain how. If I make widgets in a factory; let’s say I am expected to make 100 widgets in 240 days for a salary of $50,000, and my company cuts our days and pay; as the two go hand in hand, to 233 days (3%), and another 5% give or take in cuts and thus now I only make $46,000 – yet I am still expected to make 100 widgets; in fact, because of cuts, I have to pick up the widget making of laid-off employees and must now make 120 widgets (yes, I went from an average of 35 students in my class to 42) with as much precision and perfection as I was before. This is the classroom Darrell. We teachers love our jobs, and we roll with the punches, but let me tell you that the 8-10% pay cut really does hurt, especially given more kids in a class and fewer days to get just as much, if not more done. And we made the concessions because we understand the reality of the economy – and realize that students still need to be taught with as much love and energy as they ever have, if not more.

  • Darrell Baumbach posted at 4:39 pm on Tue, Oct 9, 2012.

    Darrell Baumbach Posts: 9405

    Ms Bobin stated...Just as with Social Security, both the employee and the employer contribute to this pension plan. "Generous?"

    Yes, generous. Find me one teacher anywhere in the country that would be willing to trade their teacher's retirement plan for social security and Ill show you a teacher married to a billionaire and does not mind losing money.

    That is because a teacher retiring with just 30 years of service earning $75,000 per year for highest 3 years will earn a respectable 4,700 per month as an unmodified benefit assuming she retired at age 68.

    That same person working 40 years and paying into Social Security having earned $75,000 last 4 years of employment would only get about $2,400 per month. That makes STRS much better in my view.

  • Darrell Baumbach posted at 4:20 pm on Tue, Oct 9, 2012.

    Darrell Baumbach Posts: 9405

    Wendy Coe stated...I believe with the 7 furlough days and the % of pay cut plus the freeze in their salaries it was close to 10%

    Let me get this straight... you stated with a straight face that the school district gives their teachers 7 days off, a basic unpaid vacation, and you want to count that as a pay cut? You then perceive that a real 2% pay cut is now a 10% pay cut because of this unpaid vacation?

    Hummm.. if the teachers worked the same number of days and got less pay, that would be a pay cut.

    Please let me clarify. I think teachers are in a noble occupation and work their tails off. My mom and wife were teachers and I saw first hand how great a job most teachers perform.

    However, this economy is not business as usual. Millions of people all over the country who were working are now unemployed and cannot find work.

    In this environment, I am making the point that now is not the time to burden the tax payers with more obligations. I am saying that a 2% pay cut was microscopic considering the pay raises that had been given over the last 10 years which was higher than inflation. Many in the private sector have had no pay raises in 6 years and even pay cuts. Many have no benefits and social security that pays 1/2 the amount STRS does.

    Considering the wonderful benefits package and outstanding pension plan included as well, I would think the teachers and teacher's unions would have a little compassion for people less fortunate than themselves and not request taxes to go up.

    When the economy improves in 10 or so years after California finally makes the state more business friendly, things can improve as the tax base increases.

  • Joanne Bobin posted at 12:42 pm on Tue, Oct 9, 2012.

    Joanne Bobin Posts: 4488

    "Never mind that massive amounts of money are mandated to fund STRS which is by far one of the most generous pension plans in the world"

    Just as with Social Security, both the employee and the employer contribute to this pension plan. "Generous?" If you call collecting less than 30% of the last year's "working" salary, then it is generous. And forget about collecting any Social Security that you may have paid into. Thanks to Ronald Reagan, anyone who collects a public pension virtually forfeits any SS benefits they may have earned.

    And as the "spouse" of a teacher who made $75,000/year and retired after 30 years of service, why are you outraged? Maybe you think your spouse didn't earn it.

    "Never mind tax payers pay for most of the top of line health, dental and vision plans for the entire family of employees."

    Just how far into a public employee's pocket are you wanting to go? Do you think that the people who pay YOUR salary - your clients, presumably, should dictate how YOU spend your money and what benefits YOU are entitled to?

  • George Neely posted at 10:21 am on Tue, Oct 9, 2012.

    George Neely Posts: 12

    Here is a summary of the concessions by LUSD teachers:
    - 2% cut in the salary schedule
    - 7.5 furlough days for the years 2010 and forward that amount to another 4% reduction in pay
    - The equivalent of 5 furlough days pay for the school year 2009-10. This was paid for with the use one time funds from the Federal Government.
    - A 1 year delay in step pay that amounts to about 3% for most teachers

    And just for clarity, this contract was put in place in October, 2010, a month before the election of the current Board of Education.

    Also, as for the original comment about waste, we have cut $28 million from our budget by first identifying waste, and then cutting it from our budget. We solicited ideas from employees and the public. We monitored and revamped processes where possible. We instated innovative programs that cut our utility cost by over $1 million and other programs that kept some of our students(and therefore dollars) here instead of sending them to the County Office of Education. And then, to get the extra money we needed, we raised class sizes. We are financially stable at this moment and will remain that way barring any further cuts.

  • Joe Taxer posted at 8:29 am on Tue, Oct 9, 2012.

    Joe Taxer Posts: 1

    I agree Wendy. The info should be confirmed. I believe it's also the teachers who were the only union group who has received part of their pay cuts back on July 1st this year. And I might add the largest part of the Budget!

  • wendy coe posted at 7:41 am on Tue, Oct 9, 2012.

    wendy coe Posts: 39

    I think there needs to be a correction regarding the teacher contracts. I am sure Mr. Jeff Johnson or a current trustee can correct the information that Mr. Baumbach has posted. I seem to recall that the current contract with the teacher union was greater than 2%! I believe with the 7 furlough days and the % of pay cut plus the freeze in their salaries it was close to 10%. To bash the teacher's union regarding that pay cut they took is totally unacceptable. They also pay taxes and need to survive in this economy. This is about kids, the state how they pay the schools, and this misinformation the general public understands regarding how the schools are funded. It is about the future of public education and KIDS!

  • Darrell Baumbach posted at 4:40 am on Tue, Oct 9, 2012.

    Darrell Baumbach Posts: 9405

    Well written letter that explains why one should be motivated to increase taxes to pay for our schools.
    Never mind that over 50% of all taxes paid are mandated to be used for said expenses. Never mind a chuck of lottery money is mandated to go to education. Never mind that massive amounts of money are mandated to fund STRS which is by far one of the most generous pension plans in the world. Never mind tax payers pay for most of the top of line health, dental and vision plans for the entire family of employees.
    We should even after this, pay more in a state that is chasing away jobs and its tax base. Are we in the twilight zone or is this an episode of Punked?

  • Darrell Baumbach posted at 4:29 am on Tue, Oct 9, 2012.

    Darrell Baumbach Posts: 9405

    Letter stated...So here are my thoughts on the situation: No one likes or wants a tax hike, but the impact of another $12 million cut from our district's budget is unacceptable.

    I remember a few years back, the school district was in negotiations with the teacher's union over their contract. We were in a crisis situation where many teachers were threatened to be laid off. We had no money but were rescued by Federal tax dollars whose source was Obama stimulus money. We knew then that we needed to take fiscal responsibility seriously and do something significant.

    I was expecting a 10-15% cut in salary and benefits since as this letter stated, a vast majority of obligations derived from this area. So what was agreed to by the school board positions manned by ex teachers? A 2% cut...when that was published I nearly fainted. I could not believe the union got away with such selfish results that benefited their members at the expense of fiscal responsibility.

    Now, we are asked to pay more... and more... and more. They want to ignore their irresponsible behavior and rescue them from the consequence of their own irresponsibility.

    In my view, it is time for the teachers union to come to the rescue. It is time to renegotiate their contract even if it is not up yet. It is time for tax payers to say...enough is enough, exercise tough love principles and vote against these two propositions as asking for more does not solve the problem of the cause of the crisis.

  • Betty Dean posted at 12:22 am on Tue, Oct 9, 2012.

    Betty Dean Posts: 144

    The way that LUSD Budgets it's money and the waste??? Please, I say NO I will not vote too give LUSD another penny of my tax dollars........... VOTE NO on both! LUSD Manage your money more responsible........


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