Schools and the economic crisis

Schools and the budget crisis

SACRAMENTO — State Superintendent of Public Instruction Jack O'Connell today announced that since the beginning of this year the number of school districts that may be unable to meet future financial obligations because of the continuing state budget crisis and inadequate funding for public education has increased by 38 percent. For the list of school districts, please visit Second Interim Status Report, FY 2009-10 - Fiscal Status.

"We are seeing an alarming spike in the number of school districts that are having trouble meeting their financial obligations," said O'Connell. "Schools on this list are now forced to make terrible decisions to cut programs and services that students need or face bankruptcy. This trend will worsen if the Governor's proposed cuts to public education are enacted in the 2010-11 budget. I have grave concerns that more and more school districts will face financial crisis unless state lawmakers find solutions to the state budget crisis and provide adequate funding for our schools."

Public education in California received $17 billion less in state funding than anticipated over the last two budget years. As a result, more than 20,000 teachers have received pink slips this year. Summer school has been eliminated, class sizes are increasing, and art, music, libraries, school nurses, and sports programs have been cut.

The California Department of Education semiannually prepares Interim Status Reports on the financial status of the state's 1,077 school districts, county offices of education, and joint powers agencies, which are all known as local educational agencies (LEAs). The reports include a certification of whether the LEA is able to meet its financial obligations. 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.

In the first Interim Status Report of the 2009-10 filed earlier this year, a total of 126 LEAs received a negative or qualified certification. In the latest second Interim Status Report for 2009-10, 174 LEAs are on the watch list — a 38.1 percent increase. The 174 LEAs represent about 16 percent of the state's LEAs.

"These statistics illustrate what a dire situation our schools are in," added O'Connell. "Even the infusion of billions of federal stimulus funds last year was not enough to stem the rising tide of financial woes for school districts around the state. I am very grateful to the Obama administration for providing California funds from the American Recovery and Reinvestment Act, but it is critical that Californians understand that our schools will face another wave of economic woe at the end of this year when the federal stimulus funding is exhausted."