The Blog

Local Budget Transparency and Cap on School District Reserves

The Governor has agreed to put language in a State Budget Trailer bill that would call for transparency and a cap on local school district budget reserves. Local Budget Transparency would begin with the 2015-16 fiscal year and the cap is triggered when the state begins to put money away in the Proposition 98 “Rainy Day” fund.

We support this because taxpayer dollars need to be spent in our classrooms and on our children not sitting in bank accounts. Parents and communities need to know how much money local school districts are holding back and not spending on our students. Asking for school district transparency on school district reserves is all about local control and accountability for parents and communities.

Wednesday night the Budget Conference Committee voted to place this language in a trailer bill. However, management folks (CSBA, CASBO, ACSA and all other large districts’ management lobbyists) are protesting and very busy calling the Legislature and telling them that this is not fiscally prudent and that a cap on reserves would be a hardship to districts. We all know… that is not true.

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KEY POINTS

  • Our children have endured years of devastating budget cuts and Californians overwhelmingly voted to pass Prop. 30 to keep the cuts from happening. It is unacceptable for districts to sit on up to 30% budget reserves when California ranks 50th in per pupil expenditures nationwide. 
  • Districts should spend the taxpayers’ dollars they receive in the classroom, that’s what is provided for. 
  • This money does not belong to the districts, it belongs to the taxpayers whose children are in those schools right now and who need a good education right now.
  • Transparency on school district reserves is all about local control for parents and communities. All information should be shared with parents and communities so they can make informed choices.
  • When the state is doing well enough to put money in the Proposition 98 “Rainy Day” fund, why should districts build their reserves and not spend dollars on students?

There is no prohibition against an adequate minimum reserve once the Prop 98 reserve kicks in. In fact, districts are still allowed 2 to 3 times what we think is the adequate minimum reserve of 3%.

FACTS:

  • The average reserve statewide in 2012-13 was 30.34%;
  • About 28 small elementary districts had reserves over 100% - a few had over 200%;
  • 85 or more (medium unified school districts) had reserves of over 50%;
  • 75 or more had reserves over 40%;
  • 370 had reserves of 20% (small, medium, elementary, high school, and unified); and, 
  • 140 more had reserves of 15%.
This shows that 73% of the districts in California had reserves of MORE THAN 15% in 2011-12.
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