Bills again target hated spending cap on schools

Bills again target hated spending cap on schools

(Calif.) Unsuccessful attempts to overturn a cap on district reserve funds have failed to stop critics of the policy from continuing to try.

No less than six bills still alive in the Legislature would repeal or adjust the regulation, which Gov. Jerry Brown included in a last-minute budget deal a year-and-a-half ago – some say as a concession to teacher unions.

Last year, several similar bills that targeted the cap made progress before being left to wither and die. One, however, – SB 799 by state Senators Jerry Hill, D-San Mateo, and Steve Glazer, D-Orinda – was approved by the Assembly and several Senate committees last fall, keeping it alive as the vehicle through which proponents still hope to revise the statute.

“We have an issue that’s problematic for our membership and we’re going to keep knocking on that door until we can get it addressed,” Vernon Billy, CEO and executive director at the California School Boards Association, said in an interview Tuesday. “This is a very serious issue, and is also why we had several hundred school board members [at the Capitol] today advocating on it. There’s no weakening in terms of their resolve to try and get a change done.”

SB 799 supporters, a coalition of groups representing school administrators, finance officials and trustees, stand by their assertions that the cap hampers a district’s ability to save for tough economic times and for long-term projects. They also point out that after the initiative became law, Wall Street lenders indicated that the cap could negatively impact district credit ratings. Some school officials said they had already seen resistance from creditors in spite of state officials’ claims that the economic conditions that would trigger the cap are several years away – something some analysts have disputed.

Hundreds of parents and civil rights advocates were quick to join the school coalition’s campaign to repeal or modify the reserve cap after it was written into a 2013-14 budget trailer bill to take effect upon approval of a related measure on that November’s ballot.

That voter-approved Constitutional amendment, Proposition 2, calls for increased contributions to the state’s own rainy day fund and establishes a separate state-level reserve account for schools. The legal provision triggered by Prop. 2 requires that districts with reserves more than two times the legal minimum must spend down the cash if the state deposits even $1 dollar into its own school savings account.

The provision limiting reserves is said to have been a concession by Brown and Democratic lawmakers to the California Teachers Association, whose members want more dollars available for salaries and classroom expenses, and who otherwise may have opposed Proposition 2 at the polls.

A rally Tuesday on the Capitol steps sponsored by CSBA to highlight SB 799 and other pro-education bills included hundreds of school trustees and several legislators, including Senators Ben Allen and Mike McGuire and Assemblyman Matthew Harper.

Allen is one of 14 co-authors on SB 799, which would make adjustments to the reserve cap by increasing it from six percent of all of a school district’s general fund accounts to 17 percent of only unassigned and special reserve fund balances. The change gives school administrators more flexibility in their handling of unencumbered monies, supporters say, and allows them to maintain higher reserves for tough economic times.

The bill also has the support of the League of Women Voters of California, California State PTA and Children Now, and several newspapers up and down the state – including the Los Angeles Times and the San Francisco Chronicle – have written editorials saying the cap is detrimental to schools. more