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Record number of school districts in state face bankruptcy

May 21, 2012 |  6:06 pm


Pummeled by relentless budget cuts, a record number of California school districts are facing bankruptcy, state Supt. of Public Instruction Tom Torlakson announced Monday.

The Inglewood Unified School District and 11 others -– most in northern California -- are currently not able to pay their bills this school year or next, according to a biannual report on the financial health of the state’s 1,037 school systems compiled by the state Department of Education. An additional 176 school districts may not be able to meet their financial obligations.

All told, the financially troubled districts serve 2.6 million children. And the picture could dramatically worsen if initiatives to raise taxes for public schools by Gov. Jerry Brown and others fail to pass in November, officials said.

“This is the kind of record no one wants to set,” Torlakson said in a statement. “The deep cuts this budget has forced -– and the uncertainties about what lies ahead -– are taking an unprecedented and unacceptable toll on our schools.”

Education officials blame much of the crisis on a double blow by the state: budget cuts amounting to 20% over the last three years and the deferment of millions of dollars owed to schools but not dispersed until months later.

In the northern rural area of Shasta, for instance, two school districts are facing potential bankruptcy for the first time in the county’s history, according to Adam Hillman, an associate superintendent with the Shasta County Office of Education. Both Pacheco and Cottonwood Union School Districts, tiny districts struggling with the added problem of declining enrollments, have increased class sizes. Pacheco is negotiating pay cuts with teachers, and Cottonwood is closing one of its three schools, Hillman said.

“They’ve reduced everything to the point where they’re not spending on anything except for core academic, health and safety areas,” he said.

Inglewood, where declining enrollment has exacerbated financial problems in the last few years, received a $17.4-million short-term loan earlier this year to avoid a looming bankruptcy. But board President Johnny J. Young said the deferment of $1.3 million in state funds will force the district to seek another loan to keep it afloat next year.

Inglewood schools have also been asked to hold “enrollment fairs” to attract students as a way to bring more dollars into the district, he said.

Inglewood is the only school system in L.A. County to receive a “negative certification,” signaling it does not currently have the cash to pay its bills this year or next. An additional 26 districts, including L.A. Unified, may not have the cash in the current and two subsequent fiscal years –- the largest number in at least a decade, according to the L.A. County Office of Education. Fifty-three districts are in sound financial health, according to the state report.


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Photo: La Tijera School in Inglewood, part of the only school system in L.A. County with a "negative certification." Credit: Mel Melcon / Los Angeles Times