Capitol Alert

More state aid stabilizes school district finances

First graders raise their hands to answer a question after library aide Cindy Ramirez reads the book "Abe Lincoln's Hat" on Feb. 13, 2014 at San Pedro Elementary School in Los Angeles.
First graders raise their hands to answer a question after library aide Cindy Ramirez reads the book "Abe Lincoln's Hat" on Feb. 13, 2014 at San Pedro Elementary School in Los Angeles. Los Angeles Times

Recent infusions of state aid, and the prospect of more to come, have – not surprisingly – improved the financial stability of California’s school districts, the Legislature was told Thursday.

However, Joel Montero, chief executive officer of the Bakersfield-based Fiscal Crisis and Management Assistance Team, told a state Senate budget subcommittee that a number of districts remain either insolvent on teetering on the brink, including three of the state’s largest.

FCMAT, as it’s known, monitors the fiscal health of school districts and, along with county schools superintendents and the state Department of Education, interevenes when districts’ finances deteriorate due to either mismanagement or unforeseen circumstances.

Districts in immediate trouble have “negative certification” while those is lesser distress have “qualified certification.”

The numbers in both categories skyrocketed during the last recession, when the state chopped its aid to districts to balance its own budget. Negative certifications hit a high of 19 in 2008-09, but have since declined, Montero said, to four – three small rural districts and Inglewood Unified. Those with qualified certifications peaked at 176 in 2011-12 but have since dropped to 27.

The latter, however, includes three of the state’s largest districts, including the very largest, Los Angeles Unified. Oakland Unified and San Diego Unified are also on the qualified list.

“Year-to-year, we have more stability,” Montero told the senators, but added, “We still have significant deficit spending” in some districts.

“There are districts that have lived on the margin,” he said, citing an inability or unwillingness to adjust to declining enrollment by closing schools, or overspending revenues as chronic problems. “It’s always a leadership issue,” he said.

Call Jim Miller, Bee Capitol Bureau, (916) 326-5521. Follow him on Twitter @jimmiller2.

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