California state leaders have notified their intention to delay issuing $2.9 billion in payments to school districts and counties due to cash flow problems. A joint letter from Gov. Arnold Schwarzenegger, Controller John Chiang and Treasurer Bill Lockyer announced the apportionment to schools due at the end of September could now possibly be delayed until January.
“This hurts schools because it comes immediately on the heels of the state paying back an earlier deferral, combined with the fact we don’t even have a budget for the coming year yet,” said ACSA Legislative Advocate Adonai Mack.
ACSA Executive Director Bob Wells said the state is once again shifting its budgetary problems onto school districts.
“This will now delay billions of dollars from schools for up to 90 days, but school districts still have to meet their payrolls,” Wells said. “Schools have been a convenient target for policymakers to aim their budgetary maneuvers at over the past two years, and many schools in the state are clearly already at the breaking point.”
Early in 2010, legislation was passed in an emergency session that allowed the governor, controller and treasurer to delay payments to schools and counties for up to three months to deal with cash flow issues. Schools had been notified earlier this year that payments could be delayed, but Mack said that doesn’t make the situation any easier.
“The bottom line is deferrals always create a hardship for schools,” he said. “School expenses don’t stop just because the state has decided to delay its payments to schools. Coming on the heels of the massive cutbacks we’ve been handed over the past two years, this only exacerbates the situation.”
After returning from their summer break, the Democratic Caucus leaders, Sen. Pro Tem Steinberg and Assembly Speaker Perez, released their latest plan to close the state’s budget shortfall.
Subsequently, the Joint Legislative Budget Conference Committee closed out remaining open items on the budget. This sets the stage for a possible floor vote, which had not occurred at press time. As expected, the governor and the leadership of the Republican Caucus denounced the proposal.
The Democratic proposal basically includes a combination of $8.3 billion in program cuts, some additional revenue, a suspension of Proposition 98 and a modest reserve.
The proposal has decreased from $54 billion for education to $52 billion and suspension of the minimum guarantee.
Mack said that with the current legislative session ending Aug. 31 and an important November election looming, the pressure to pass the state budget will continue to increase. While many believe that the budget impasse could last well into the fall months, many others believe that it is just as likely that a budget could be completed simultaneously with the end of the legislative session.
For a full detailed analysis of the latest budget proposals, please click here.