Legislation would allow school districts to store away more money for hard times

State senators Glazer, Hill among 18 legislators favoring move to designate up to 17% for 'rainy days'

Two state senators have introduced a bill that would allow state school districts to store away more money for difficult financial years than is currently allowed.

Sen. Steve Glazer (D-Contra Costa), whose district includes Pleasanton, and Sen. Jerry Hill (D-San Mateo and Santa Clara counties) introduced the bill last Thursday. It would allow public school districts to save 17% of their budget to be used during economic downturns.

The bill, SB 799, would raise the mandatory cap on school district reserves that has stood at 6% of a district's total budget. Raising the cap would allow school districts to designate 17% of their budgets as "unassigned" expenditures, which essentially means they can save that money for a rainy day -- like another recession -- rather than being legally required to use it this school year.

"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," Glazer said in a statement.

Glazer and Hill are among 17 state senators and Assembly members who co-authored the bill.

The proposal states school districts could be allowed to save more money than the cap allows if they were facing emergencies or future large purchases, such as technology infrastructure or school buses.

The proposal also exempts small school districts with few than 2,501 students and districts that don't receive aid from adhering to the savings cap.

A state bill passed in 2014 created the cap, which is technically designated as "two or three times the minimum recommended reserve for economic uncertainties" but which usually works out to 6% in most districts.

Before the cap was created, the average school reserve amount was 30%, according to the California School Boards Association.

While SB 799 was introduced to the Senate last week and referred to the Senate Rules Committee, the bill itself isn't new. SB 799 originally passed the Senate in the spring and was passed to the state assembly, but it stagnated there, Glazer's spokesman Steve Harmon said.

The original bill, which also dealt with the topic of cap funding in school districts, was picked up and most of the original language was scrubbed and replaced with the current language.


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