As California revenue rises, school districts on firmer ground

Published: Monday, Jun. 17, 2013 - 12:00 am | Page 1B
Last Modified: Thursday, Aug. 29, 2013 - 7:05 am

Three local school districts, including the region's largest in Elk Grove, have stabilized their budgets enough to receive a clean bill of fiscal health from California education officials.

The state requires districts to demonstrate that they have enough money to meet their financial obligations for the current fiscal year, as well as two subsequent fiscal years.

As the state budget and economy improve, districts are counting on more money in the future, helping to balance their books over the next few years.

The Legislature's adoption last week of the main budget bill should give districts more confidence that they can count on that money in the future. At the same time, Brown's plan to overhaul the education funding system provides districts more control over their budgets.

More than half of school districts that received an early warning of fiscal problems last year are no longer in fiscal danger, according to a California Department of Education report.

In Sacramento County, Elk Grove Unified, Galt Joint Elementary and Robla Elementary school districts all moved off the early-warning list.

Center Unified, Folsom Cordova Unified, Natomas Unified, Sacramento City Unified, San Juan Unified and Galt Joint Union High school districts are still in financial peril, receiving "qualified" warnings. That means the districts may not be able to pay their bills over three consecutive fiscal years.

Placer Hills Union Elementary School District is the only other district in the four-county Sacramento region – which includes El Dorado, Placer, Yolo and Sacramento – on the early-warning list, also with "qualified" status.

Districts that remain on the list receive a "qualified" or "negative" warning, the latter of which is more serious and can lead to intervention by county education officials.

The number of at-risk districts spiked in previous years as tax revenue plummeted and the state slashed funding for schools. The nonpartisan Legislative Analyst's Office observed that state funding uncertainty made it difficult for districts to show that they could balance their books two years out.

In the 2006-07 school year, only 22 California school districts made the roster of the financially troubled. Last year that number had exploded to 188. This year only 92 are on the list.

California currently has 1,037 school districts and educational agencies, according to the state Department of Education.

State schools chief Tom Torlakson credited the passage of Proposition 30, which increased income taxes on high earners and raised sales taxes, for the shrunken list.

Sacramento County Superintendent of Schools David Gordon said that districts could submit final budgets at the end of this month that could look completely different from the spending plans they proposed earlier, given the new state budget.

Some districts on the "qualified" list, such as Sacramento City Unified and Folsom Cordova Unified, initially plan to use additional state funds to balance their books.

Others, such as Natomas Unified, are exploring whether they can add more school days or reverse other budget cuts.

California school officials are accustomed to financial uncertainty. Every year they are asked to pass budgets before legislators approve a state budget.

Passing budgets three years out is even more difficult, said Elk Grove Unified Superintendent Steven Ladd, especially with uncertainty about cost-of-living adjustments, federal cuts and increases in health care costs.

Call The Bee's Diana Lambert, (916) 321-1090. Follow her on Twitter @dianalambert. Read her Report Card blog at

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