California School News — August 2017
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Legislative Update: Reserve Cap, Other CSBA-Sponsored Bills

As the 2017 legislative session winds down, legislation to address the school district reserve cap is approaching Gov. Jerry Brown’s desk. With recent amendments, a clearer picture is emerging of the eventual framework for a fix to the current law — a law which, if enacted, would threaten the fiscal solvency of California’s public schools by forcing school districts statewide to limit their reserve levels and spend down existing reserves.

Senate Bill 751 (Hill & Glazer), CSBA’s sponsored reserve cap bill, was approved by the Assembly Appropriations Committee on Aug. 23 on a unanimous vote and sent to the Assembly Floor.

The other active reserve cap bill is Assembly Bill 235 (O’Donnell, D-Long Beach), which was approved on Aug. 21 by the Senate Appropriations Committee and sent to the Senate Floor after a key amendment sought by CSBA was made. This critical amendment entirely exempts all small school districts of less than 2,501 average daily attendance from the reserve cap law, aligning it with the language of SB 751. Both SB 751 and AB 235 also exempt all basic aid districts.

SB 751 would also raise the level of the statutory reserve limit to 17 percent — a nationally recognized standard for government level reserves. AB 235 does not include language that would adjust the level of the statutory reserve limit; however, AB 235 does include language that adds a new economic condition (or “trigger”) that would have to be met for the current reserve cap law to become active. Under current law, if a deposit of any amount (even $1) is made to a state Proposition 98 rainy day fund, the cap would become active. Under AB 235, the Proposition 98 rainy day fund would need a minimum balance of 3 percent of the K-12 portion of the Proposition 98 guarantee to become active.

As of this writing, both SB 751 and AB 235 bills await floor votes in the Assembly and Senate, respectively — if passe d, the bills will be sent to the Governor after concurrence votes back in their house s of origin.

Additional CSBA-sponsored legislation: Also on Aug. 23, CSBA’s sponsored SB 527 (Galgiani, D - Stockton) was moved t o the Assembly Appropriations suspen sefile. The bill would provide financial relief for school districts and county offices statewide — in particular for small and rural lo ca l educational agencies — by adding a statutoy cost- of-living adjustment for home - to - school transportation. Like SB 751, SB 527 ha s received unanimous approval in any commit tee or floor vote thus far.

On July 25, Gov. Brown signed A B 1354 (Kiley, R-Roseville), an LC FF “cleanup bill,” into law, marking the fourth such CSBA-sponsored cleanup bill passed by the Legislature in as m any years. These four bills have repealed more than 80 obsolete categorical programs from t he Education Code, all of which were no longer necessary in the new era of LC FF.

Other bills on suspense include :

SB 328 (Portantino, D-La Cañada Flintridge), the CSBA-opposed bill t hat would prohibit any middle or high school in the state from starting classes before 8:30 a.m.

AB 1217 (Bocanegra, D-Pacoima), a bill to establish a n independently run Stat e STEM (Science, Technology, Engineering and Mathemat ics) school in Los Angeles County, is also opposed by CSBA , a sit could set a precedent of the Legislature actig as a charter authorizer, circu mventi ng already existing school district, county board and St ate Board of Education authoriz ation prot ocol for charters.

AB 1321 (Weber, D -San Diego), an LCFF tran sparency bill related to financial reporting, is now supported by CSBA after amendments to align the language with federal law in requiring reporting of expense s by school site, broken out by federal, state and lo cal source. Originally, the bill required rep or ting to include school site information on state funding broken out by base, supplemental and concentrationg rants.

Bot h the Senate and Assembly hear their respective suspense files on Sept. 1, deter min in g which bills with fiscal impacts will proceed in 2017, and which will not advance. The 2017 session ends on Sept. 15, and Gov. Brown will have until Oct . 15 to sign or veto bills.