Legislature taking notice of risk school insolvency poses to state SI&A Cabinet Report – News & Resources

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Legislature taking notice of risk school insolvency poses to state
By Kimberly Beltran
Monday, August 06, 2012

With a record number of school districts facing the serious threat of insolvency and news of yet another seeking a state bankruptcy bailout, key members of the California Legislature are beginning to take a harder look at the fiscal risks failing schools pose to the state.

Burdened with upwards of $20 billion in funding cuts and payment deferrals over the past four years, 188 local educational agencies were placed on a state list this spring designating them at risk for not meeting their financial obligations either this year or next.

Topping that list is Inglewood Unified, whose trustees voted late last month to begin the formal process for a state takeover after being unable to close a $10 million budget deficit on their own.

This week, a special legislative oversight committee will conclude a series of informational hearings on the status of the state’s school takeover process – an exercise, a staffer suggested, in preparation for what might be on the horizon.

 “For 20 years, we had seven districts in financial trouble, now we have 188 in either negative or qualified status,” said Teri Burns, senior policy director at the California School Boards Association, which advises its member districts on various issues, including fiscal.

“You’re talking about almost 20 percent of the school districts in the state looking at this and saying, ‘We don’t know