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State Budget Lacks Key Prop. 98 Repayment

California school districts as a whole used more funding than they took in for the first time in 12 years, according to a state report released this month. The report showed that California schools continue to face lean times. The number of school districts relying on multi-year deficit spending rose nearly 37 percent in the fiscal year 2003-04, the study by the State Controller's office reported. The report came just as state legislators approved a $117 billion budget that failed to restore significant funding owed to schools under Proposition 98 guarantees. The Long Beach Unified School District Board of Education earlier this month unanimously approved a resolution calling upon Gov. Arnold Schwarzenegger and the Legislature to honor an agreement to restore $1.4 billion this year owed to school districts throughout the state as guaranteed by Prop. 98. Withholding guaranteed funds has serious implications, not only for this year but for many years to come, as each year’s education budget is calculated based on the funds appropriated in the previous year. The LBUSD Board resolution stated that a $9.8 billion reduction in funding to schools since 2001 already has resulted in the elimination of nurses, counselors, reading specialists, instructional aides, librarians, social workers and maintenance workers—as well as the elimination of athletic, music and art programs—at many schools across the state. In the State Controller’s study, 29 out of 1,040 districts reported in 2004-05 that they may not or will not be able to meet their financial obligations to employees and vendors. Although LBUSD reported that it would meet its financial obligations, the district has relied upon reserves for years to make ends meet. Rising costs of health care and workers' compensation, combined with declining enrollment, have caused expenditures to exceed revenues.