State Superintendent of Public Instruction Jack O’Connell is drawing attention to the increased number of school districts that, due to the state budget crisis, may not be able to meet their future financial obligations without drastically reducing spending. At present, there are California 19 school districts whose budgets have a “negative” state certification and 89 districts with a qualified certification status, which means that their financial status is in jeopardy. “Billions of dollars of state budget cuts to education have left local school districts with deficits that local school boards and administrators are attempting to address,” said O’Connell. “The decisions they have been forced to make are heartbreaking: increasing class size, laying off teachers and classified staff; eliminating summer school, canceling arts, music, and sports. These are choices no educator in California wants to make. But the alternative is bankruptcy and entering state receivership. ” California has an early warning system designed to alert districts in danger of failing to meet their financial obligations. Interim financial reports on the fiscal health of school districts and county offices of education are prepared semi-annually. The certifications are classified as positive, qualified, or negative. A positive certification is assigned when the district will meet its financial obligations for the current and two subsequent fiscal years. A qualified certification is assigned when the district may not meet its financial obligations for the current or two subsequent fiscal years. A negative certification is assigned when a district will be unable to meet its financial obligations for the remainder of the current year or for the subsequent fiscal year. “Because of the sharp downturn in our economy and deep cuts to education, we have seen a dramatic increase in the number of districts that are on the negative or qualified certification list,” explained O’Connell. “Unfortunately, the cuts to public education that are part of the state budget are likely to result in even more districts being added to this list.” Just two years ago, there were five districts on the negative certification list and 19 on the qualified list. Today, there are 19 districts on the negative certification list and 89 districts in California with a qualified certification status. California’s gaping $24.3 billion deficit has led to the Governor and the Legislature to propose cutting K-12 public education by $5.5 billion. Recently, the Legislature also approved a plan to defer millions more in payments that are due to schools in the coming year. These cuts and deferrals are in addition to the nearly $12 billion in cuts to public education that were already approved in the budget deal struck this past February.
08 California School Districts Face Bankruptcy or Deep Cuts
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