Potential School District Reserve Cap Drives Debate Over Prop 2

We’re taking a look this week at all the statewide ballot measures California voters are deciding this fall. Today: Proposition 2 – the constitutional amendment that would create a state budget reserve. A little-known new law tied to Prop 2 has some school officials and parents upset.

Five years ago, California was sending out IOUs instead of checks and faced a $40 billion deficit. Governor Jerry Brown and state lawmakers from both parties say Proposition 2 might not entirely protect California’s budget from another recession – but it sure would help. Former Assembly Speaker John Pérez authored the measure:

“Long-term fiscal discipline is good for predictability; it’s good for decreasing the cost of financing the state; and it’s good for the kinds of long-term investments that the people of California expect us to make.” 

The only formal opposition to Prop 2 comes from the non-profit parent volunteer group “Educate Our State.” Palo Alto parent Jennifer Bestor says her group doesn’t mind the rainy day fund, at least in theory. But she’s furious over a little-known provision in this year’s state budget that will take effect if Prop 2 is approved. It would cap school districts’ reserves in any year the state puts money into a new and separate “rainy day fund” for schools that’s created by Prop 2 … unless a county superintendent grants an exemption.

“It simply appeared out of nowhere at the 59th minute of the eleventh hour. And we couldn’t believe that something so blatantly wrong – such a power grab – would come out of Sacramento at a time that they were touting local control.” 

Supporters of the provision argue that the districts ought to spend the money in the classroom – not store it in an unreasonably large reserve.

The statewide associations that represent California school boards and administrators are remaining neutral on Prop 2. They support the rainy day fund but detest the school district reserve cap provision. They’re counting on the governor’s promise to revisit the issue next year.