Article Source: CA State Senator Jerry Hill
Governor Brown Signs Bill by Senator Hill to Ease the Cap on School Districts’ Reserves Senate Bill 751 Takes Effect January 1
SACRAMENTO – Governor Brown signed legislation today by Senator Jerry Hill to ease restrictions on how much school districts can hold in their reserve funds as savings.
The restrictions, called the reserve cap, were established in 2014 as part of a state budget trailer bill. Many school districts contend, however, that the cap is too restrictive and does not allow them to save as much as they need.
“This bill makes reasonable and appropriate changes to existing law to provide schools with adequate flexibility necessary to maintain fiscal solvency while simultaneously prioritizing the education of students they are currently serving,” said Governor Brown in a message that accompanied his signature on SB 751.
“I’m grateful for the Governor’s support on SB 751. The legislation allows school districts to save for fiscal uncertainties and prevent adverse impacts to students and teachers,” said Senator Hill, D-San Mateo and Santa Clara Counties. “Californians have not forgotten the hard lessons of the Great Recession. They approved a rainy day fund for the entire state to prevent devastating cuts when downturns occur. This legislation enables school districts to better protect themselves against economic downtuns.”
SB 751 exempts basic aid school districts and districts with average daily attendance of less than 2,501 students from the reserve cap provisions.
The bill also:
· Raises the reserve cap percentage to 10 percent from the current average of 6 percent
· Modifies the reserve cap trigger so it is significantly less likely that the reserve cap would ever become active
· Clarifies that the cap applies only to General Fund revenue, not other accounts such as construction, cafeteria, charter school or other funds
Senator Steve Glazer, D-Orinda, joined Senator Hill to author the SB 751 with Assemblymembers Adam Gray, D-Merced, and Patrick O’Donnell, D-Long Beach, as principal co-authors.
The new law takes effect January 1.
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Resources:
Governor Brown’s signing message:https://www.gov.ca.gov/docs/SB_751_Signing_Message_2017.pdf
Text of Senate Bill 751:https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB751
SB 751 Fact Sheet:
http://sd13.senate.ca.gov/sites/sd13.senate.ca.gov/files/sb751_factsheet_final.pdf
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Source Credit: CA State Senator Jerry Hill
