Santa Clarita Valley school district officials said Friday lawmakers were attaching an “irresponsible” bill to California‘s proposed budget by suggesting districts have a limit on their financial reserves.
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Proponents of the bill say it’s needed to make sure Proposition 30 funds are directed into the classroom. Administrators say the state is usurping local control.
The state’s Legislature is expected to vote Sunday, the constitutional deadline to pass a budget.
“It’s just fiscally irresponsible to artificially cap a reserve that allows us to deal with what may come,” said Newhall School District Superintendent Marc Winger.
“The trailer bill imposes several requirements on school districts adopting a budget with a reserve greater than the minimum required for economic uncertainties and an absolute cap on reserves the first fiscal year funds are placed into the Public Sector Stabilization Account,” according to a statement from the Association of California School Administrators, which “vehemently opposes” the bill in an EdSource editorial.
The language gives a small amount of leeway on the state-mandated 3 percent reserve, allowing some districts to keep up to 6 percent.
Representatives from the California Teachers Association support the move, calling for districts to increase classroom spending in light of Proposition 30.
“School districts should spend the taxpayers’ dollars they receive in the classroom, that’s what it is provided for,” according to a statement from the California Teachers Association. “It is unacceptable for districts to sit on up to 30 percent budget reserves when California ranks 50th in per pupil spending nationwide.”
A statewide average shows a 3 percent budget reserve would only provide a district with funding for about six to eight days’ worth of payroll, Winger said. A 6 percent reserve would last about three weeks.
If approved, the requirements would go into effect beginning in the 2015-16 fiscal year.
With the state still struggling to rebound from the Great Recession, reducing the amount of a budget reserve a school district could keep doesn’t make sense, Winger said.
“Like any good business, we keep a reserve for uncertainty,” he added. “By law it has to be 3 percent — our district directs it to be 5 percent.”
The Acton Agua Dulce Unified School District recently received a negative certification for its budget for failing to meet the 3 percent reserve, something that could have hit more local districts if they didn’t have their own fiscally conservative rainy day fund, Winger said.
The move means the Los Angeles County Office of Education now provides fiscal oversight for AADUSD.
“If we didn’t have a healthy reserve through the crisis,” Winger said, “more of us would have received a negative certification.”
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Source: Santa Clarita News