The financial health of most California school districts have significantly improved over the past six years. Last year, pension uncertainties forced 41 local educational agencies (LEAs) to declare that they are struggling and may be in financial trouble.
Thanks to a strong economy and a fully funded share of state LCFF revenues provided in next year’s budget, this year, just 25 Local Education Agencies (LEAs) submitted a “qualified” fiscal report—which is a formal recognition that a district might not be able to meet all its financial obligations in the following two years.
After years of continued deficit spending, our school board now shares the infamous and unprecedented distinction of being one of those 25 out of 863 LEAs in the whole state to submit a blemished budget with a “qualified certification.”
It’s quite obvious that even though the state increased its funding over $20.0M to the CCUSD over the last six years. But, it was not enough to pay for this board’s outlandish spending habits. So, members chose to deficit spend an additional $18.0M over that same period. Their years of ill-advised spending choices now has put this district into an unsustainable, $3.0M structural deficit.
I guess they didn’t believe those of us who warned them of the problems of the continued practice of deficit spending!
Now that these board members have led our district onto a fiscally precarious cliff, they are now asking for the community to bail them out with a $16.5M, seven-year, $189 annual parcel tax.
Talk is cheap!
Actions speak louder than words. And by their past actions, board members have shown they cannot be trusted to spend any new taxes in a responsible manner. Don’t forget, it was their spending decisions that got us into this structural deficit, in the first place!
Even the First and Second Interim Reports from two or three years ago forewarned the board that their deficit spending were “primarily due to salary and benefits increases” and yet, these members kept on spending it on district salaries, seemingly oblivious to the district warning signs.
The district’s pension contributions are based on the employee’s salary. So it doesn’t take a rocket scientist or financial wizard to know that every year the board agreed to raise employee compensation, they also raised the district’s cost of its pension contribution, thereby, worsening the district’s deficit. As of January, last year, of the 48 unified school districts in LA County, the CCUSD was one of only three districts to deficit spend and ended its fiscal year with the highest spending deficit of all the other unified school districts in LA County at over $4.2M.
According to the district records, all four elected members of the current board have voted to deficit spend more in the past two fiscal years (16-17 and 17-18) at $9.145M, than the previous five years (11-12 to 15-16) combined at $9.062M.
This last school year (2017-18) if the HR Department hadn’t found a way to save over $1.85M on employee benefit costs, the district’s deficit would have been over six million dollars. So their deficit spending is not coming under control, it is actually growing worse, not better.
Now that board members want local homeowners to give them a new influx of money. They will be on their best fiscal behavior, showing locals just how responsible they can be in their spending until the parcel tax is passed. Once they receive their new influx of money, they will be able to return to their old spending habits, that is, until they need even more money, down the road.
Last time we passed a parcel tax (76%) was back in 2009 and brought in $1.2M annually. Ninety-percent of the $1.2M went to teacher salaries. So voters shouldn’t expect anything different from this board. Much of it will be paid on behalf of or directly to the adults in the district. It will be used to pay for negotiated raises and automatic, annual Step & Column salary increases and to pay for the district’s increasing state-mandated CalSTRS and CalPERS payments. So very little, if any, of this parcel tax will be seen by our students in the classroom.
Even though many from the community may agree with these board members on other local and national issues, voters cannot lose sight that the end result of their past deficit spending has resulted in a $3.0M structural deficit. This should leave little doubt that these members have failed to grasp even the most common sense fiscal responsibilities entrusted to them in overseeing our school district’s financial stability.
The unprecedented public acknowledgement that the CCUSD may not be able to meet its future expenditures, is a startling one, to say the least. These elected board members have brought our district closer to insolvency than at any time in our district’s history.
Now they want local tax-payers to bail them out with a $26.5M 7-year plan!
Most home-owners can afford to pay the $189 annual parcel tax. That is not at issue here. At issue, is whether we can trust these current elected board members to spend our tax dollars in a responsible manner.
Proponents of the parcel tax will warn voters that by not passing this tax measure, it will put district jobs in jeopardy. But, when you read such campaign scare tactics, just remember these two facts: That over the past six years our district’s state funding has increased by almost 20 million dollars and that it was this board’s decision, their choice, to continue its deficit spending totaling over 18 million dollars during the same time.
So it won’t be because of the lack of state funding that is putting district jobs on the line; it will be due to the current board members’ own past reckless spending that is putting local district jobs on the chopping block.
So get ready to be bombarded with likeable, campaign rhetoric about how we should trust them and about how trustworthy they will be, if you’ll just pass this parcel tax.
To show how their reckless spending has increased in the last few years, district figures show that board members have deficit spent more in the past two fiscal years ($9.14M) than in the previous 5 years combined–$9.04M