San Diego School District Should Declare Insolvency: Board Member

One of the leaders behind the cash-strapped San Diego Unified School District said board trustees need to be proactive and declare insolvency now.

“We need to declare a financial emergency and recommend that true legal insolvency is heading our way like a freight train if not this coming year, without a doubt the following year,” said SDUSD Vice President Scott Barnett.

The idea has been discussed for years concerning the finances of the second largest school district in the state but Barnett said he will try and convince his fellow board members that he believes now is the time.

Barnett said the plan to lay off 2,000 employees coupled with the district’s plan to sell off valuable property and spend whatever cash on hand is available means one thing - the district is insolvent.

“If a family had to sell their furniture to buy groceries, or are using their savings to pay the mortgage, they’re insolvent,” he said.

“Sadly many families are insolvent, but we are insolvent, we are doing what these families are doing, using desperate tactics and devastating classrooms.”

“We either sacrifice our political power or we sacrifice 2,000 employees,” he said.

Barnett said he will recommend that the board rescind all the layoff notices. If that is done, the district would not be able to pay its employees.

That would trigger insolvency and a takeover by the state.

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But, Barnett said, in managing the insolvency now, jobs and students would be protected.

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In the process of insolvency, the state would take over the district and the superintendent and board members would lose their power.

If SDUSD were to make the move now, the County Board of Education would step in first to help the district then the state can send in a team to advise.

The state may have to loan money to the district and a state official would manage that money and decisions affecting the district and its schools, meaning the board and the superintendent would no longer have any official duties but would instead be considered an advisory board.

Get an analysis of Barnett’s plan here.