Dan Walters

Opinion: School reserves law entangled in California politics

Sir Walter Scott’s famous aphorism, “Oh, what a tangled web we weave when first we practice to deceive,” is particularly applicable to one bill now pending in the state Senate.

Assembly Bill 531 would not formally repeal an odd and indefensible decree by Gov. Jerry Brown and the Legislature, but would render it functionally moot by making the law even more obtuse and complex – tangled, if you will.

The decree, enacted as a budget “trailer bill” a year ago with virtually no advance notice, limits reserves that local school districts could maintain if the state put some money – even $1 – into a proposed state school finance reserve.

Local school officials, saying it would make weathering the periodic dips in their revenue more difficult, cried foul, both about the decree and the sneaky process by which it was enacted.

Brown, they complained, had made a big deal about “subsidiarity,” which he defined as allowing local school officials to manage their finances without nitpicking from Sacramento, yet was willing to countenance this intrusion.

Moreover, they pointed out, Brown was preaching the virtue of building state reserves, asking voters to create a “rainy day” fund via ballot measure.

It soon became evident, without anyone saying so, that the reserve cap was a favor to the California Teachers Association, which complains that some local school reserves are too high, thus shielding money from salary bargaining.

It was widely assumed that Brown sought the limit to gain the powerful union’s neutrality on his rainy day fund measure, Proposition 2. Public employee unions tend to dislike such revenue set-asides because they leave less on the table for spending.

Months later, Brown more or less acknowledged publicly that the reserve limit was a tactical political ploy. Given that acknowledgment, and given that Proposition 2 was enacted last November, logic would dictate that it should be repealed, as the local school officials demanded.

This month, 26 Democratic legislators sent a letter to Assembly Speaker Toni Atkins and Senate President Pro Tem Kevin de León, urging repeal of the cap or at least a loosening of its provisions. Five civil rights and children’s advocacy groups made their own appeal.

The groups had hoped that the new budget would resolve the issue. The education trailer bill that surfaced last week was silent, however, reportedly due to a conflict among legislative leaders. A repeal amendment was rejected Friday on the Senate floor.

Outright repeal would be difficult because it would be an admission that the cap was the wrong thing to do, and politicians almost never admit that they make mistakes.

The solution, therefore, may be AB 531, carried by the chairman of the Assembly Education Committee, Long Beach Democrat Patrick O’Donnell, a former teacher closely aligned with the CTA.

The bill, which sailed through the Assembly and the Senate Education Committee, would allow districts to place unlimited amounts of money in “committed fund balances” – in effect a special reserve fund – and exempt them from the new reserve limit.

Thus, the limit would remain on the books but by going through some accounting dipsy-doodles, districts could render it inoperable.

A tangled web, indeed.