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California’s school district budget woes could worsen if tax idea fails

By Theresa Harrington
Monday, March 21st, 2011 at 7:28 pm in Education, Mt. Diablo school district, Theresa Harrington.

State Superintendent of Public Instruction Tom Torlakson warned today that schools already in financial distress could suffer greatly if the governor’s proposed tax extensions don’t come through.

Here’s the news release he sent out, which detailed First Interim budget reports through October:

“SACRAMENTO—Nearly 2 million students—roughly 30 percent of pupils in California—now attend school in a district facing serious financial jeopardy, State Superintendent of Public Instruction Tom Torlakson announced today.

‘The emergency confronting California’s schools is widening and deepening,’ Torlakson said. ‘As disturbing as these numbers are, unless the Legislature moves to place the Governor’s tax extension plan on the ballot, they are just the tip of the financial iceberg facing school districts up and down the state.’

Torlakson’s findings came as he released the results of the first semiannual Interim Status Report that represents budget certifications for California local educational agencies (LEAs) through the end of October 2010. The reports reflect a certification of whether an LEA is able to meet its financial obligations.

The number of LEAs on the negative certification list rose to 13 from 12 last year at this time. The number of LEAs on the qualified certification list dipped slightly to 97 from 114 last year at this time.

Torlakson noted that the certifications do not take into account the impact of the state failing to extend temporary tax increases adopted two years ago that are set to expire July 1 unless placed on the ballot by the Legislature and approved by voters in a special election.

The California Department of Education semiannually prepares Interim Status Reports for the Superintendent on the financial status of the state’s 1,032 LEAs, comprised of school districts, county offices of education, and joint powers agencies.

The certifications are classified as positive, qualified, or negative. A positive certification is assigned when the district will meet its financial obligations for the current and two subsequent fiscal years.

A qualified certification is assigned when the district may not meet its financial obligations for the current or two subsequent fiscal years. This certification allows the LEA’s county office of education to provide assistance to the LEA.

A negative certification—the most serious of the classifications—is assigned when a district will be unable to meet its financial obligations for the remainder of the current year or for the subsequent fiscal year. This certification means the LEA’s county office of education may intervene in the LEA’s finances.

The numbers used to arrive at the certifications preceded the Governor’s Budget proposal, and therefore do not reflect the potential loss of temporary tax revenues, and the new proposed multi-billion dollar funding deferral.

‘Schools face the daunting challenge of up to $4.5 billion in additional cuts if tax extensions are not placed on the ballot by the Legislature and approved by voters in June, an additional cut of 10 percent.’ added Torlakson. ‘This would be devastating to an education system that has already sustained $18 billion in state funding cuts over the last three years – a loss of one-third of the annual budget for schools.’

After decades of recording relatively steady numbers of LEAs on the Interim Status Report list, the numbers moved up sharply in 2008-09 and again in 2009-10 as a result of deeper and deeper cuts to education. It is anticipated that the numbers will move up even more sharply in 2011-12 if the tax extensions are not placed on the ballot and approved by the voters.’

For more information and a list of LEAs on the Interim Status Report, please visit http://www.cde.ca.gov/fg/fi/ir/interimstatus.asp

However, this news release doesn’t include updated information from districts’ second interim reports, which were filed with county offices of education last week.

In the East Bay, the Hayward district filed a “qualified” second interim, while the Emery and Mt. Diablo districts filed “positive” reports. However, Hayward would plunge back to “negative” if the tax extensions fail and Mt. Diablo’s three-year budget is counting on furlough days and benefits cuts unions haven’t yet agreed to take.

Emery has sufficient reserves the weather the cuts, the superintendent told me today. John Swett is seeking another parcel tax to try to get out of its “negative” certification.

Do you think Torlakson’s efforts to raise awareness of school districts’ financial troubles will make a difference in getting the tax extensions on the ballot?

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