The state's top educational management organizations, including ACSA, CASBO, CCSESA, CSBA,
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. If approved, the requirements would go into effect beginning in Fiscal Year (FY) 2015-16.
This proposal is fiscally irresponsible, inconsistent with the principal of subsidiarity, which serves as the foundation of the Local Control Funding Formula (LCFF), and discounts the critical role that prudent budget reserves play in the ability of school districts to maintain fiscal solvency. In addition, it fails to recognize numerous factors going into district decisions on reserve levels, while ignoring recent history with regard to how districts used budget reserves during the great recession to avoid even greater cuts to educational programs, and certificated and classified staff reductions.
The language in this bill forces districts to spend reserves above a three percent minimum, or prove to lawmakers why prudent fiscal solvency matters in their districts.
This proposal is counterproductive to the concept of subsidiarity, a core principle of the LCFF. Education funding decisions are determined locally, not at the state level. By adopting this language, lawmakers are taking funds and control from school districts, thereby impacting programs and staff. In essence, lawmakers are playing with money earmarked to teach students.
We recommend lawmakers remove this trailer bill language from any and all decisions being made inside the State Capitol. We want to be good partners in establishing a system that works for all the parties. The existence of this language is counterproductive to the locally-controlled reforms just put into place less than a year ago.
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