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What Happens if Our School Districts Go Bankrupt?

by: Brian Leubitz

Wed Jul 01, 2009 at 12:13:48 PM PDT


While the Legislature is busy trying to figure out how to cut as fast as they can, some school districts are at risk of not being able to cover their expenses at all.  Kim Wetzel at MediaNews rounded up some data:

A recent analysis found that 19 districts statewide have filed "negative" interim budget certifications; 89 districts filed "qualified" certifications. Two years ago, there were just five with negative budgets and 19 qualified.

"Billions of dollars of state budget cuts to education have left school districts with deficits that school boards and administrators are attempting to address," O'Connell said at a news conference in San Jose. "The decisions they have been forced to make are heartbreaking: increasing class size, laying off teachers and classified staff; eliminating summer school; canceling arts, music, and sports. These are choices no educator in California wants to make. But the alternative is bankruptcy and entering state receivership."(IBA 7/1/09)

Basically, a negative certification means that the district "will be unable to pay the bills for the remainder of the current year or the subsequent year." The qualified certification means there is a risk of being unable to meet the obligations.  You can grab the complete list here.

The largest districts to be negatively certified are Pajaro Valley Unified in Santa Cruz County, and quite unsuprisingly enough, Vallejo City Unified.  Of course, the City of Vallejo is currently in bankruptcy proceedings as we speak, so not a good time to be an elected official in Vallejo, I guess.

But what happens if these districts can't cut their way out of it? DO they simply stop paying teachers? Send class sizes to 60 per teacher? Stop air conditioning the buildings? Certainly the state won't be there to bail them out, and while some districts are getting parcel taxes passed, the 2/3 requirement for those votes makes them difficult to pass in some locations.  Apparently some would rather that their children be educated in cramped classrooms with poor facilities.

As to whether districts can declare bankruptcy - that still seems a stretch. The districts have decent mechanisms for layoffs when they are out of cash, but that is clearly only hurting our own future.

Brian Leubitz :: What Happens if Our School Districts Go Bankrupt?
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One consequence of the shift (0.00 / 0)
Will be more part-time teachers in our classrooms. This is already starting to happen - some of the 26,000 teachers that got laid off this spring were rehired on 1-year temporary contracts, or are being hired to teach only a few courses at a time.

This is a very bad move for K-12 education, where effective teaching requires stability for schools and teachers. Instead schools will be pushed to treat teachers like unskilled labor - interchangeable, expendable, and cheap.

You can check out any time you like but you can never leave


My daughter's district is on the qualified list (8.00 / 1)
What it means is that next year, if nothing changes, we will implement dramatic and awful cuts on top of the awful cuts that have been made already.

The rural districts tend also to be dealing with declining enrollment, so it's a double whammy of lost revenue - the state swinging the axe for 10%  and then 5-10 lost students, for another $50k or so. The economic decline is causing families to move from the rural areas to cities.

Add to that that the state says helpful things like "we won't fund transportation" for a school district that covers 300 square miles when diesel will probably be back at $3.50 or $4 a gallon soon.

The 2/3 requirement often means that even if every family with kids votes for a parcel tax, it could still fail.

Rural schools also have less access to donations and sponsorships, and are further from resources that might volunteer to work with their kids. Some of these kids have barely been to a city and don't have a sense for the wide world and where they might find a place in it with their education. The loss of important mentors like experienced teachers will hurt those areas, and the state in general, for a generation, as they are left behind economically.

The only good news about receivership is that there will be so many districts in jeopardy that the state won't really have the resources to meddle; there will be plenty of company.

Fry, don't be a hero! It's not covered by our health plan!


Plus, schools could face lawsuits soon (0.00 / 0)
The Williams Act provides for any citizen to call unsafe or unsanitary conditions at public schools to the attention of the district.  This school district is obligated to remedy the problem.

So without sufficient custodians or maintenance staff, the schools are going to get steadily less clean and more unsafe.  School districts are already understaffed here.

Best stock up on hand sanitizer for your school age kids.  They'll need it.

I'm union staff, but not a spokesperson for my union - all posts represent my views solely.


Not just schools... (4.00 / 1)
I've always considered that the cruelest irony of the budget crisis is the IOUs/stopgap measures the state is forced to use to deal with the shortfall inevitably involve breach of contract as well as opening the state up to lawsuits based on underfunding projects where spending is mandated by statute.

Not only is the budget crisis huge to begin with, but each failure to deal with it results in consequences that are even more expensive and onerous to address.

You know, I always used to wonder how the "drowning government in a bathtub" playbook would actually work; to be honest, I'm surprised at how successful it seems to be.


[ Parent ]
Probably a lot less painful (0.00 / 0)
than dealing with the budget.

Fry, don't be a hero! It's not covered by our health plan!

[ Parent ]
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