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State Deferral Will Impact Local School Districts

Without a State Budget, Local Districts Taking Brunt of Cost

POSTED: 6:25 pm PDT August 25, 2010
UPDATED: 12:51 pm PDT August 26, 2010

Earlier this week the governor, state controller and treasurer decided to delay payments to school districts across the state, so the state could pay its bills.

The deferment was set to happen in October, now districts have only a few days left before having to find the money themselves to pay September bills.

While it was anticipated that $2.9 billion in payments to districts and counties would be deferred starting in October, the newer date will hit districts hard.

"Now the state has said, pretty much, you're on your own, we'll defer your revenues," said Mark Fulmer, Asst. Superintendent of Kern County Schools. "And you go out and borrow the money, that is a cost to the district, that is a hidden cost the state has passed on to local districts."

Fulmer says that just about all county districts have done a good job maintaining reserves, making tough budget cuts and preparing for the worst.

But the early deferment means districts budget plans will once again have to be altered.

"Every district can do everything it can to make sure what happens in the class room stays whole, but its just harder and harder to do that," Fulmer said.

In order to have the cash to pay bills, some districts, despite all of their planning, are having to take out short term loans to cover the lost tax revenue.

Greenfield Union School District is the fourth largest district in the county, it had to lay off 27 teachers this year and had to open a line of credit to get through these new cash flow issues.

"We have to be very conservative in what we do, before we do any expenditures we have to make sure they're really something we need to do," said Superintendent Chris Crawford.

But once the state does pass a budget money will be freed up again to schools, but that won't solve the funding problem entirely.

"That really isn't going to solve the problem because once again funding for public schools has been reduced," Fulmer said.

Most districts are preparing to receive less money when a budget is passed then what was proposed in May, which is how districts plan for the year.

Schools will receive the delayed payments eventually, the problem is if they take out a loan they have to pay off the interest.
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