Glazer bill aims to let school districts store more money for hard times

Local state senator among 18 legislators backing move to designate up to 17% for 'rainy days'

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

The San Ramon Valley's State Sen. Steve Glazer (D-Orinda) joined colleague State Sen. Jerry Hill (D-San Mateo) introduced the bill last week. It would allow local districts to save 17% of their budget to be used during economic downturns.

Senate Bill 799 would raise the mandatory cap on school district reserves that now stands at roughly 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 re-balances 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.

He and Hill are among 16 State Senate 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 fewer 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 Assembly, but it stagnated there, according to Steve Harmon, a spokesman for Glazer's office.

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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Posted by PSMacintosh
a resident of Danville
on Aug 26, 2015 at 11:20 am

A. I'm not sure about this.
Sounds good on the surface, but, with Government/Schools, once there's a "reserve" of money, then all sorts of people get itching to spend it. The Labor Unions will want it spent, etc..
I'm all for good, conservative financial policies and having "savings" on an individual level, but I'm not sure that this is a good idea on a Governmental level.

Of course, no one's going to suggest that the excess money get returned to the Taxpayer (and then have to ask--make the case then-- the Taxpayer for more money when the need gets greater).

What part of a school's revenue is determined (or influenced) by a downturn of the economy, such that there needs to be a reserve against such downturn?
I'll have to plead ignorance in this matter--how school money is garnered and funded.

Sounds like a lot of room for "money shuffling" to occur.

B. "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."

So this means a larger cap for reserves PLUS the ability to go beyond that cap for "emergencies" or "future large purchases". Wow, I can pretty much get anything to fall under the definition of those terms.

I think Glazer is trying to be helpful....but the phrase "SLUSH FUNDS" just keeps popping into my mind.

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