Proposition 2 contains a poison pill preventing local school boards from planning for economic downturns. Tacked on to Proposition 2 is a budget trailer, limiting district reserves to 6% of their general fund budget – about two to three weeks of payroll. The California Associations for School Administrators (ACSA), School Finance Officers (CASBO), and School Board Members (CSBA) all oppose the reserve cap. The Santa Clara Unified School District Board Of Education joined school boards across the state, passing a resolution opposed to the cap on local reserves.
As the San Jose Mercury News stated about the 6% cap (7/25/14): “It was slipped into this year’s budget deal, with no real public vetting, as a political payoff to labor unions that whine about districts supposedly hoarding money they could use for raises.”
Creating a state rainy day fund should not prevent local school districts from doing the same.