California Senate Bill SB751

California 2017-2018 Regular Session

• Introduced: 2/17/17
• Refer: 3/9/17
• Report Pass: 4/20/17
• Refer: 4/20/17
• Report Pass: 5/1/17
• Engrossed: 5/8/17
• Refer: 5/26/17
• Report Pass: 7/13/17
• Refer: 7/13/17
• Report Pass: 8/23/17
• Refer: 9/12/17
• Enrolled: 9/14/17
• Chaptered: 10/11/17
• Passed: 10/11/17

Caption

School finance: school districts: annual budgets: reserve balance.

Impact

This legislation aims to foster fiscal responsibility among school districts by curbing excessive reserve balances, potentially enabling the reinvestment of surplus funds back into educational infrastructure and programs. However, it allows for some flexibility; county superintendents can grant exemptions for up to two consecutive years if districts can demonstrate extraordinary fiscal circumstances, such as infrastructure or technology projects that necessitate higher reserves. This change aims to create more equitable access to school funding and allocate resources efficiently, particularly in larger districts.

Summary

Senate Bill 751, introduced by Senator Hill, amends Section 42127.01 of the Education Code to adjust the requirements governing the annual budgets of school districts in California. The bill modifies the existing limitations on the combined assigned or unassigned ending fund balance in school district budgets. Previously, these limits applied after a transfer to the Public School System Stabilization Account; SB 751 changes this condition to apply when the fund balance exceeds 3% of the combined total revenues for school districts, thereby restricting the budget reserves to no greater than 10%. The bill specifically exempts basic aid and small school districts from these requirements.

Sentiment

The overall sentiment surrounding SB 751 appears to be supportive, particularly among proponents of fiscal reform and budget transparency in education. Advocates argue that by imposing reasonable limits on school reserves, the bill encourages better allocation of funds towards direct educational expenditures. However, some opposition may arise from school districts concerned about the potential impact on their financial flexibility, especially in situations where unexpected expenses may arise, hence the need for exemptions.

Contention

One notable point of contention is the balance between ensuring fiscal prudence and allowing local districts sufficient autonomy to manage their finances according to local needs. The exemptions provided for districts to retain higher reserves may mitigate some opposition; however, the need for documentation and justification could create additional bureaucratic hurdles. This tension underscores an ongoing debate in California regarding the balance of power between state mandates and local control in education finance.