Plan to outsource substitute teachers dominates TUSD budget meeting

Discussion about proposed budget cuts targeting central administration while leaving school sites nearly untouched was overshadowed Tuesday by TUSD’s plan to outsource substitute teachers.

TUSD worked on plans to freeze vacant positions, increase energy efficiency, monitor spending and cut spending in areas such as training, travel and supplies as part of the district’s effort to handle a nearly $6 million shortfall.

The effort to restructure the budget to ensure resources are applied where they are the most important and beneficial to students began last fall, said Karla Soto, Tucson Unified School District’s Chief Financial Officer.

Of the nine affected departments, only one — curriculum and instruction — saw an increase in funding, she said.

The restructuring plan topped TUSD’s $5.7 million in cuts, amounting to more than $7 million in savings, Soto said.

The additional $1.2 million could potentially be reallocated to technology, books, supplies and more — a shift of funds into the classroom called for by Gov. Doug Ducey and the state Legislature.

TUSD’s budget for the upcoming school year includes a $3.5 million increase in inflation funding, plus $3.2 million in retroactive inflation funds, for a total of $6.7 million. However, it loses nearly $5.8 million in capital funds and $815,000 used by TUSD for teacher salaries — barely allowing the district to break even.

The state’s delaying the release of some funds and withholding of others means TUSD has no option but to cut from within to make up for the $4.6 million it is expected to lose due to declining enrollment, Soto and TUSD Superintendent H.T. Sanchez said.

The district’s troubles, however, do not end there. Unlike past years, TUSD will be required to provide health care benefits for eligible substitute teachers under the Affordable Health Care Act — a mandate that could cost an estimated $1.6 million, the district says. To mitigate that expense, TUSD is proposing outsourcing substitute teachers to a company that would assume the obligation of providing medical benefits at a lesser cost — and quality — than what the district would have been required to provide.

Under the agreement, however, TUSD would still cover the daily rate, which the district would like to increase, allowing it to become more competitive in securing substitute teachers.

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Despite having a pool of more than 800 substitutes, only 414 were active in TUSD last school year. The district identified more than 4,100 instances in which classes were not covered.

Boosting the pay rate for both daily and long-term substitutes would cost nearly $500,000. The total amount TUSD would be responsible for is $1.2 million less than if it provided medical benefits.

A concern raised about the outsourcing option is that it prevents qualifying substitute teachers from paying into the Arizona State Retirement System, generating more savings for TUSD, which has to match those contributions. In response, the leasing company is looking to offer a 401(k) matching program.

TUSD would also work to incentivize substitutes to become permanent, certified teachers, which are in demand across the state. TUSD has more than 120 vacant teaching positions with about two months left before classes resume.

“Our obligation is really to get classroom teachers fulltime into our schools,” Sanchez told the Governing Board. He said the outsourcing option enables TUSD to maintain teacher raises and a class-size initiative without closing schools or conducting layoffs. That appealed to Board Member Cam Juarez.

TUSD Governing Board President Adelita Grijalva downplayed concerns from Board Member Mark Stegeman about lower-quality benefit and retirement plans. She said her concern is whether students will be better served.

Grijalva added that TUSD monitors, custodians and others who keep schools running work just below the threshold to qualify for benefits because the district cannot afford it.

“So if we are going to be extending health benefits to anybody, it is those employees that we rely on every single day, Monday through Friday, that the schools could not survive without … Those are the people I want to take care of.”

Sanchez added that the district may be in a position to increase the hourly pay of the employees Grijalva referred to if the outsourcing option and other proposals are approved later this month.