A publication of the Association of California School Administrators

Good decisions at the table start with good fiscal data

Financial facts are a key ingredient in your overall negotiations strategy

By Barrett Snider, Brett W. McFadden and Louise Taylor | January | February 2025

Any chef, baker or culinary connoisseur will tell you that the start to a great dish or dessert is great ingredients. The same applies to TK-12 collective bargaining. A local education agency’s success at the negotiation table starts with the collection and use of accurate and easy-to-understand fiscal data. This should come as no surprise — where is the typical roadblock in negotiations? Money.

We cannot provide extra money to solve that challenge for you, but we can offer advice based on decades of experience in negotiations and school finance.

Develop your 'fingertip facts' Your agency’s fiscal data and facts can be powerful tools if used well. Although our employee organizations can exert considerable political influence and leverage, it is management that will generally have control over accurate fiscal data and facts pertinent to negotiations. The trick for management negotiating teams is to prepare data and facts early and continue to update facts in accordance with the annual budget development and reporting calendar all LEAs are required to follow. Do not wait until you have commenced negotiations, and certainly not when you suddenly reach impasse or factfinding.

We recommend you collect the following “fingertip facts” prior to the start of all negotiation cycles:

The cost of one percent of salaries, health and welfare benefits, and total compensation for each bargaining unit and for management and non-represented employees.
Unrestricted funding levels.
Restricted funding levels — how and where.
Updated multi-year projections.
The number of employees, by fund and major funding source.
The details of employee benefits and their costs.
Leaves, stipends and other non-salary benefits.
Major cost centers — special education, maintenance/operations, transportation, cafeteria.
Any Fund 17 special reserve or Fund 40 capital facilities reserve and whether they are committed or unrestricted.
Your current collective bargaining agreements — all of them. Have them at the ready; know them inside and out.
Data on how your LEA’s salaries, benefits, schedules, class sizes, and work day compare to neighboring districts, county office(s) or charter schools.

While you are compiling these and other relevant data points, check for accuracy. School finance and budgeting is complicated. Even seasoned pros will miss something or make a critical math mistake. Try to avoid such mishaps. All negotiations have elements of an adversarial nature. Our labor partners will, pursuant to their role, review and question management’s fiscal information and assumptions. In some circumstances, they might not even seem to care or dismiss them outright. Nevertheless, even a minor mistake when it comes to the numbers can be used against the management team, or at the very least, foster confusion, misunderstanding, or mistrust between labor and management at the table.

Using your data as part of your overall negotiation strategy Good fiscal data and facts are certainly key ingredients to any negotiations process, but it is how they are used that will yield a successful negotiated settlement. We recommend management teams focus on the following three action steps throughout the spectrum of bargaining: Inform, monitor and project.

These steps are time-consuming, but vital. You can and should sustain them for successful negotiations. Once structured, they will become part of your standard operating procedures. Each step will require consistent dedication of time and communication. But, from our experience, such efforts can have exponential benefits and help to facilitate a negotiated settlement that all parties can approve. Our advice for each of these three key steps is as follows.

Inform Simply put, if you are not telling your LEA’s fiscal story, the associations will make up their own story. Their story will be through their own lens, often influenced by their state-level associations. We strongly recommend developing an ongoing communication strategy that consistently informs all leaders and partners about current budget condition(s) and out-year projected fiscal outlooks.

We recommend that you communicate from within first, and then outside of your organization. Start with your staff and employees (all of them!), and then work out to parents, community, business leaders and others. Do not forget your board of trustees. The superintendent should be sharing the same or similar messaging with them.

Do not make the mistake of just sharing budget and fiscal information with your union leadership and/or negotiations team. In our experience, information and facts provided in negotiations are not always disseminated to the association “rank and file.” If you are sharing facts, especially those that will be shared at a board meeting or within a state-required budget report, then the facts can be shared with your district employees. Share only factual information. Do not advocate for a position or action. If you advocate in your communications, you have likely committed an unfair labor practice, subject to review and penalty by the state’s Public Employees Relations Board (PERB).

One effective tool in your communication “toolbox” could be the establishment of a budget and/or fiscal advisory committee. The committee needs to meet regularly. We recommend at least quarterly, if not monthly, from September to May. It is critical that membership includes district and community partners — consider inviting your bargaining units, parents, community and business leaders, and administrative staff. The following are a few “best practice” recommendations:

Set a calendar — quarterly at the least, however, monthly may be best.
Make the meetings short (max 90 minutes), but keep the group informed about the ever-changing fiscal conditions and projects facing your district or charter school.
Share internal district and external state and national policy and trend impacts on your district budget.
Keep communication to three key points when possible.
Avoid fiscal jargon — or clarify what it means.
Clear and concise wins the day — graphs and graphics are winners.
Always provide dollar and percentage figures.
Preview planned budget changes with the committee — “No surprises!” should be the aim. You may even get some useful feedback.
Regularly address the common areas of misunderstanding: ending balances; step and column; reserves; “hidden money;” lottery money; fund accounting and what can and cannot go to salaries and benefits; and multi-year projections, and why budget figures fluctuate so frequently.
Share the big picture. School finance and budgets are complicated, so be mindful of how much information and facts committee members can handle. Provide the overarching perspective.
Don’t overlook the power of building relationships, understanding and trust. Do this particularly with the negotiating team. Report all information from the budget committee to the negotiating team and to the association presidents and negotiation chairs if they are not on the budget committee.

Education leaders have other effective communication portals and opportunities at their disposal. State statutes require at least five to six annual budgetary actions, reports and updates to your governing board. These are great opportunities to share fiscal facts and perspectives and to reiterate your fiscal story. District teams will have the first and last say on these board items, so do not hesitate to use such opportunities to share vital budget and fiscal information.

Other communication opportunities include presentations to site councils, parent PTC/PTA chapters, school site staff, and board study sessions. Education leaders, especially superintendents and chief business officers, are also encouraged to actively engage with their community(ies). Share budget updates and presentations with local chambers of commerce, community organizations and clubs (Rotary, Lions, nonprofit organizations), as well as city, county or other municipal leaders. Basically, think about any major group or organization that has an element of influence and leadership in your community(ies) and get in front of them periodically.

Monitor Internal monitoring of what’s happening within your LEA: Staying apprised of budget impacts from within your agency is critically important. Every LEA’s budget and fiscal condition is dynamic. It will change over the course of a fiscal year — sometimes significantly. This condition will often alter what you need at the end of the negotiation process to remain fiscally healthy and meet your Local Control Accountability Plan’s goals and objectives. It is imperative that district leaders create ongoing and accurate district monitoring structures. We recommend that you direct the bulk of your focus on these five vital structures in your organization:

Position control (all programs, all departments, all sites, all funds).
Accounts receivable and payable.
General fund cash projections.
Procurement and contracts.
Spending amounts and percentages on administrators (especially the administrator-to-teacher ratios), consultants, and other non-certificated/classified spending.

Remain alert and adequately plan for major changes in general fund expenditures. For example, does your agency have a new textbook adoption looming? A new student program on the horizon? A building or site renovation needed from general fund revenues? Impacts from enrollment declining, by how much, and for how long?

If your agency is facing a significant change in expenditures or revenue, then it is critically important to analyze the details, carefully ascertain the budgetary impacts, and be prepared to communicate such to your board, labor partners, school sites and community(ies).

It is crucial to remain aware of miscellaneous one-time, or limited-time funding sources such as grants, special state or federal funding (COVID-related funds, for example), or other locally based one-time funding (e.g. the sale of district property). Make sure that your out-year budget assumptions do not include these one-time, special funds unless they are confirmed and not beyond their term. Ensure that your labor partners and community are aware of the short-term nature and purpose of these one-time funding resources.

External monitoring of state budget discussions: Understanding where school funding originates, and the rules tied to that funding, is vital. In California, nearly all school funding is provided by the Legislature and governor, and keeping real-time tabs on what they are doing is necessary to successfully negotiate in the best interests of students and staff. Our labor partners have some of the most sophisticated lobbying operations in the country, and their local bargaining representatives are armed with up-to-date information, along with a perspective in alignment with their statewide associations.

Good fiscal data and facts are certainly key ingredients to any negotiations process, but it is how they are used that will yield a successful negotiated settlement.

A best practice for school leaders is to connect with organizations that will keep you informed on state and federal fiscal information (ACSA, SEAC, Capitol Advisors, CASBO and CSBA, to name a few). Stay connected with as many as you can — they all have vital intelligence for their members and clients.

Keep in mind that the state’s timeline for developing a budget is arguably incongruent with local school district/agency budget development demands (example: the March 15 layoff deadline). However, receiving advice about the direction of potential state political, fiscal and policy winds will help your management team make better decisions and determine how best to engage with labor partners. You will perpetually face the challenge of balancing fiscal prudence and employee requests; knowing the facts and the best predictions helps you wisely address this challenge.

State budget deliberations begin every January and include core funding (LCFF) and various pots of ongoing and one-time “categorical” programs (CTE, nutrition, SPED, adult ed, etc.). The process will contain important policy changes — for example, potential changes to rules governing attendance accounting. Such budgetary policy changes can result in significant impacts on school administrative operations and compliance. It is vital that you maintain communication with professionals who devote their careers to navigating the dynamics of the many political forces and policy trends that affect the final outcome of state decisions.

Project Projecting your agency’s out-year fiscal condition and challenges is critical. All LEAs in California are required to develop multi-year fiscal projections (MYPs) no less than three times per fiscal year. These must project your agency’s major revenues and expenditures over a three-year period. The MYPs include the current fiscal year and the next two fiscal years. All LEAs in the state must budget and operate on a fiscal year — July 1 to June 30 — which coincides nicely with the school year.

The MYP is your “fiscal bell weather.” It is the only tool education leaders possess to reasonably project the out-year fiscal condition of their agency. Consider the MYP as a must-have culinary tool in your budget development cupboard. Keep it updated as conditions change over the course of the fiscal year. Monitor projections from responsible sources, and consider both the optimistic and pessimistic scenarios.

While the MYP is a key tool, it has its inherent limitations. It is subject to significant change from one report to another. Therefore, education leaders can be susceptible to criticism that we are always “crying wolf.” The MYP is only a projection. The assumptions management uses, as well as those advised or mandated by the state and county offices, are merely a snapshot in time based on what we and state leaders know at that moment. Therefore, MYPs are often subject to change by any number of local, state, national, or even worldwide factors and unforeseen events. As a result, your MYPs are constantly changing in ways that are not always easily explained in a sound bite or less. Communicate that change is inevitable.

Regardless of their weaknesses, your MYPs are the only tool in your kitchen drawer that can provide an out-year perspective of your LEA’s fiscal health. MYPs can be used to run fiscal scenarios for both labor and management proposals at the negotiating table. Despite their limitations, MYPs offer you a reasonable outlook on the fiscal impact of a particular negotiating proposal on your current and out-year fiscal condition.

There are certainly many more fiscal and budgetary aspects that every management negotiating team should consider. In fact, someone should probably write a manual about them. However, start with these three key strategies as effective tools in your negotiation’s cupboard. They provide both direct and indirect benefits at the table and within the LEA community.

Informing: Shows respect for association and community leadership, and helps build trust, relationships and understanding. Monitoring: Keeps you and your employee associations apprised of the ever-evolving budget situation. Projecting: Crucially demonstrates that the budget is for now and for the future.

We cannot guarantee you will experience smooth or positive negotiations, but we do know that utilizing these three action steps as part of your overall negotiation strategy can help pave the way to hopefully smoother, positive negotiations that will ultimately benefit your student academic and social-emotional well-being.

Barrett Snider is a partner in the Sacramento-based TK-12 advocacy firm of Capitol Advisors. Brett McFadden is the managing partner for the Districts Advocates Group, a division of Isom Advisors, and a former superintendent and chief business officer. Louise Taylor, Ph.D., is the assistant executive director for the School Employers Association of California (SEAC) and a retired superintendent.