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State School Board group still fighting ‘Rainy Day Fund’ measure

Vanessa Romo | December 1, 2014

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CSBA-logoThe California School Boards Association is not giving up the fight on Proposition 2, known as the Rainy Day Fund measure.

It was passed by voters last month and sets aside bigger budget reserves while paying down more of the state’s debt. But critics say it harms school districts in the process by limiting how much they can keep in their own reserves.

“This is a bad bill, a bad law, and it needs to be repealed,” Josephine Lucey, CSBA President and Cupertino Union School District board member, said today on a conference call with reporters.

“Local reserves are critical for the solvency of a district…and without reserve funding there is no way most school district would have gotten through the great recession,” she said.

Under the new law, the state created an education reserve for K-12 education and community colleges. However, CSBA contends that if and when the state makes a contribution to the fund, that would force districts to spend down their existing reserves to a cap set by the state. Often, that cap is far below the amount a district needs to operate for more than three weeks much less weather “an unplanned event,” says Lucey.

But the California Budget Project projected the state would rarely set aside school-specific reserves, which means school budget reserves would not be impacted. In fact, some figures estimate Prop. 2 will not impact local school districts until the year 2020.

Two Republican state lawmakers members have teamed up on a bill to override the provisions of the ballot measure. AB 146, co-authored by Assembly member Kristin Olsen of Modesto and Senator Jean Fuller of Bakersfield allows districts to maintain budget reserves beyond the state-determined caps.

“Budget reserves are vital to the financial well-being of school districts and it is completely unacceptable that they were capped in this year’s budget at the last minute,” Olsen said.

“It is ironic,” she aded, “that this was done the same year that we have increased local control in education through LCFF and in the same year that Democrats and Republicans alike have praised a new State Rainy Day Fund.”

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