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Education Leaders Ask Gov. Brown To Repeal Limit On Reserves


School board members from throughout San Diego County joined the League of Women Voters of California Tuesday in urging Gov. Jerry Brown to repeal a new law that they say limits the ability of school districts to maintain adequate reserves to save for a rainy day.

Late last year, the Legislature passed Senate Bill 858, which opponents said undermines local control and fiscal prudence by preventing school districts from maintaining the budget reserves necessary to prepare for the next economic downturn, maintain fiscal solvency and protect students in California.

Under SB 858, if the state deposits as little as $1 into the statewide rainy day fund for schools — which could happen sooner than previously expected based on an improving economy — local school districts statewide could be forced to eliminate between $5 and $14 billion in savings that took years to build up.

The budget reserve cap component of SB 858 mandates that if the state trigger is pulled, local school reserve funds must be below a certain state limit or cap. For most school districts in California, the new cap on savings equates to about 6 percent, which represents only a few days of cash flow, according to Encinitas Union School District board member Carol Skiljan.

"Reserves are what help school districts weather economic downturns and volatility of state revenues and help us save for specific projects, like textbooks, technology upgrades, modernizing classrooms and maintenance projects," Skiljan said.

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