Capitol Alert: Education officials rip draft budget language limiting district reserves

06/11/2014 2:51 PM

06/12/2014 2:48 PM

School officials are raising opposition to last-minute budget language that would cap the amount of money California school districts may set aside for economic uncertainties.

The draft trailer bill language, which education lobbyists distributed Wednesday, would limit districts' fund balances in most cases to two or three times the minimum required, a potential victory for public employee unions resistant to tying money up in reserves.

In a letter to Brown administration officials and lawmakers Wednesday, the Education Management Group, which represents school boards, administrators and superintendents, said the bill language is "fiscally irresponsible" and inconsistent with principles of local control.

"For most of the last two decades, California has focused on preventing school district bankruptcies by enacting laws that require multiyear projections, enforcement of strict fiscal standards by county offices of education, early intervention, and even the authority to override the spending decisions of local governing boards," the letter said. "It is therefore ironic that, at the very time an initiative has been placed on the statewide ballot to strengthen the state's rainy day fund, that the Legislature and Governor would consider statutory changes that eviscerate provisions at the local school district level that are based on the same premise of fiscal prudence and responsibility."

The Education Management Group also objected to the last-minute insertion of the language in a months-long budget process.

"People's jaws are still agape," said Bob Blattner, an education lobbyist. "At the very last second, it's such a significant policy issue to drop."

The trailer bill language comes as lawmakers and Gov. Jerry Brown move closer to a deal in this year's budget negotiations, with the Legislature expected to vote Sunday on the main budget bill. Brown and lawmakers last month agreed to a major component of the spending plan, a rainy-day fund measure that, if approved by voters, would increase statewide reserves.

Public employee unions had objected to a rainy day fund measure previously scheduled for the ballot. Kevin Gordon, a longtime education lobbyist, said he suspects "some linkage here to the rainy day fund and the fact that the California Teachers Association didn't object" to the new rainy day fund measure. Jeff Vaca, one of the Education Management Group letter's authors and deputy executive director for governmental relations at the California Association of School Business Officials, said the bill language is "probably as much political as it is policy."

Neither the Brown administration nor the California Teachers Association immediately responded to a request for comment Wednesday. Fred Glass, of the California Federation of Teachers, said the organization is supportive of limiting reserves.

While a prudent reserve account is responsible, Glass said, "there are some districts that have 15, 20, 25 percent ending balances."

He said that "may translate into fiscal security for administrators, but it means limiting programs for students."

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