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"Two years ago I stood before you telling you we were cutting out all of the fat. Last year was the flesh, the muscle, and the ligaments. Tonight, we're completely down to the bone," said Phil Stover, chief financial officer for San Diego Unified School District, during a special board meeting. Stover was referring to the new round of cuts to make up for the projected $48 million deficit that the board will be forced to decide on in the coming days.

The reason for the deficit, said Stover and his financial team, is reduced revenues from the state for the 2010-2011 general-fund budget. In addition to decreased revenues, the state is deferring approximately $58 million in payments to the district because of its own cash-flow problems. This past February, the state decided it would defer payment to the district until July 2010. For June, 100 percent of the payment will be pushed to July and so on. Due to the deferrals, the eighth largest school district in the country will be forced to borrow more money from tax revenues and state school facility funds, thus paying anywhere from $5 to $12 million more in interest.

Looking for ways to balance the ever-expanding deficit, Stover presented ideas for additional cuts to the board. Those cuts included $9.2 million from Title III programs and employment positions, funds that are used for limited-English speaking students, $4.8 million in cuts to the special-education budget, and $3.4 million by eliminating vacant positions from the payroll.

"You're not protecting any of the course needs that help the neediest students accelerate. It's like you're saying forget those students," said board member Shelia Jackson during Stover's presentation. "I understand we're having financial difficulties right now, but I think it has to go across the board."

After staff's presentation, Interim Superintendent Bill Kowba spoke to next year's projected financial standing. "I think it is clear that next year is worse, at least at this point, without any new information, it's worse."

Board members will approve a list of cuts at their June 8 budget meeting and plan to adopt those cuts by June 22.

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