SB 751 would eliminate the limit on rainy day reserves for most small school districts and raise it for others
SACRAMENTO – The State Senate today passed and sent to the governor legislation to return greater local control to school districts in managing their fiscal affairs.
The bill, jointly authored by Sen. Steve Glazer, D-Orinda, and Sen. Jerry Hill, D-San Mateo, was supported by the California School Board Association. The measure was approved on a 39-0 vote.
In 2014, the Legislature approved legislation to cap school districts’ rainy day reserves to 6 percent of their overall budget under certain circumstances.
That action put districts at financial risk by preventing them from a preparing for an economic downturn.
This legislation eliminates the reserve cap for most small school districts. It also limits the circumstances in which the state can impose a new 10% reserve limitation on other school districts. The reserve cap will only go into effect when the state puts billions of dollars into the Public School System Stabilization Account.
“I would like to see the cap on school reserves completely repealed, but this measure improves upon current law,” Glazer said. “I encourage school districts to continue to prepare for a rainy day, which will come eventually.”
