School districts get $4 billion in IOUs instead of cash

Officials announced today that the state budget crisis has caused a delay in payments to school districts, but were hopeful that no school system would experience cash-flow problems as a result.

This delay marks the second time this year that the delivery of school funding has been postponed. A February legislative deal put off paying $2 billion that was due at that time so the state could keep its books balanced. But California’s worsening financial condition has resulted in an additional postponement applying to these dollars as well as another $2 billion that would have gone out to school districts today.

Instead, those funds, totaling about $4 billion, will be released July 30 to ensure that the state has sufficient cash on hand.

“I have no option but to delay payments and issue IOUs that push the state's problems onto schools, taxpayers, businesses and local governments," state Controller John Chiang said in a joint release with state Supt. of Public Instruction Jack O’Connell.

Word of the latest delay was “a bit of a surprise,” said Ken Shelton, an assistant superintendent for the Los Angeles County Office of Education, which oversees the financial condition of school districts in the county. “My big concern is the ability of school districts to meet payroll. This may not be overly significant. Most districts are OK for the moment.”

School systems can obtain short-term loans or borrow from other funds, including federal stimulus money, to cover the cash shortfall, which is presumably temporary. Over the last year, districts statewide have slashed programs and laid off thousands to offset state funding reductions.

Two cash-strapped county school systems, Wilsona and South Whittier, already had applied for a waiver that would allow them to receive their state funding sooner, Shelton said.

--Howard Blume

 

Comments

[Chris]

Wow, I guess the kids are expendable (sp?). I hate to think who will take care of me when I get older..... uneducated, illiteralte people who only cared about passing classes instead of learning the art of caring about people. I am sure you have had your share of these already!

Please give love and hope to those who do care about the future and fight for what's right! I will bet you all that I have that Arnold's kids will never have to worry about education or their future thanks to the Kennedy legacy....