S.D. Schools’ Fund Bonanza in Fact a Loan : Budget: Although the unexpected $13.7 million in state revenues must be paid back within two years, the windfall is expected to trigger new fights over whether to restore program cuts or teacher salaries.

In what Supt. Thomas W. Payzant called a “classic good news-bad news situation,” the San Diego Unified School District learned Friday of an unexpected windfall of $13.7 million in state revenues.

The bad news? The increase is in the form of a loan that must be repaid over the next two years.

Even so, Payzant said a “thorough analysis” of the state budget by local officials has determined that the $13.7 million could be used to rescind a recently enacted--and much despised--2.6% salary rollback for teachers.

Pending school board approval Tuesday, Payzant also said that controversial increases in class size for kindergarten through third grade could be done away with.

“Was this surprising? Yes,” Payzant said Friday. “We do have to pay the money back, but not until the state’s resources for schools begin to exceed the level of funding guaranteed for this (fiscal) year and the next. And the $13.7 million can be used to reinstate some of our cuts.”

The district recently passed a hotly contested $586-million budget for the 1992-93 school year that imposed $30 million in program and salary cuts for San Diego city schools.

Payzant said at the time he didn’t know whether the cuts would be too little, too much or just right to meet the amount of funding coming to the district.

But despite the good news, he said Friday that the cuts--which included some sports, music, counseling, supplemental writing, nursing and sex education programs--will most likely not be restored.

“All of these decisions will have to be negotiated with the teachers union,” Payzant said, “and they’ve already filed an unfair-labor-practice claim against us for taking such a unilateral action.

“The coming controversy, which I’m sure we’ll see at Tuesday’s meeting, will be between those who advocate reinstating some program cuts rather than rescinding the salary rollbacks and size of classes,” he said. “I suspect there will be lots of debate and discussion around those topics, with lots of people speaking their minds.”

Bill Crane, head of the San Diego Teachers Assn., said Friday that he supports Payzant’s recommendations and believes the board will as well.

“We agree those are the correct priorities--rescinding salary rollbacks and class-size increases,” Crane said. “As we stated to the district, there should be no layoff of any permanent teachers--and there have been no layoffs--and our next priority was reinstatement of the salary rollbacks and then reinstatement of class size.”

Crane agreed with Payzant in saying reinstatement of programs recently slashed might be foolhardy, regardless of how unpopular the cuts have become.

“It’s so difficult to cut a program. But to bring back programs,” Crane said, “only to have them face elimination again in less than a year is not a happy prospect. And from everything I’ve heard, we’re going to face more cuts again in the future.”

Crane bemoaned the loss of some of the programs, including instrumental music and AIDS awareness efforts.

“It’s sad to see such an erosion in our education system,” he said, “but I’m afraid it’s going to continue.”

Crane said the 2.6% salary rollback would mean a $700 to $800 reduction a year in gross salary to a teacher making the average of about $32,000 a year. In terms of class size, he said California is “now vying with Utah” for having the largest in the nation.

He said the average size of an elementary school classroom is now about 30 students.

“If we keep going the way we are,” he said sarcastically, “we’re going to have as fine an educational system as Mississippi, and that’s really something to strive for.”