Senator Steve Glazer, D-Contra Costa, announced this week that he has introduced legislation that would restore fiscal responsibility to the budgeting decisions of local school districts.
The legislation would reform the state’s school reserve cap to give schools more room to plan for the future.
The bill, SB 799, was introduced Thursday.
The state’s reserve cap limits school districts to setting aside 6 percent of their budgets to prepare for economic downturns. Sen. Glazer is part of a coalition of legislators and the California School Board Association proposing to raise the cap to 17 percent.
“Getting the state’s financial balance sheet in order has been an important goal of the Governor and the Legislature,” Glazer said. “That leadership should be applauded. But what we don’t want to do is exercise fiscal responsibility at the state level only to erode that same financial prudence on the local level.
“This legislation rebalances our system of state and local budget responsibility. It restores important local control by elected school board members. It provides transparency and financial accountability closer to stakeholders and the public.”
The proposal would raise the cap from approximately 6 percent to 17 percent. This cap applies only to funds that have not been set-aside for specific purposes.
Seventeen percent is the minimum recommended that the Government Finance Officers Association recommends for local governments.
Further, the proposal would ensure that the cap does not apply to money set aside for such things as emergencies or future large purchases, such as technology, school buses, instructional materials, or of future obligations such as construction projects, retiree benefits or self-insurance.
The legislation also would increase transparency by requiring school boards to specify reserve levels and why they exist. This would be done at a public meeting with an opportunity for community input; and exempt small school districts (with fewer than 2,501 students) and districts that don’t receive state aid.
Small districts can be hit with sudden expenses at any moment such as increased special education costs or loss of enrollment.