Governor Brown signs Senate Bill 751, a legislative solution to the school district reserve cap
CSBA President Susan Henry and I are pleased to report today that Governor Jerry Brown has signed Senate Bill 751 (Hill & Glazer), which provides relief from the school district reserve cap for all California districts.
SB 751 amends the current reserve cap law to provide important relief for every single school district in California. Absent a full repeal of the original reserve cap law, SB 751 ensures that if the reserve cap ever becomes active, every school district in the state will have significant relief from the reserve cap limitations that were put into statute in 2014.
The Governor’s signature on this bill reflects the tireless and diligent work by CSBA and our partners (ACSA, PTA, Children Now, the League of Women Voters, Public Advocates and EdTrust West) to secure relief from this deeply flawed law. While CSBA’s advocacy efforts were instrumental in securing the Governor’s signature today, the value of every CSBA member who engaged with their legislators on this issue – including our county board members, even though the reserve cap does not apply to county offices of education – cannot be overstated.
Specifically, SB 751 provides relief to every district by:
- Exempting ALL small school districts of less than 2,501 ADA
- Exempting ALL basic aid school districts
- Raising the reserve cap limit to 10 percent of the district’s general fund
The original reserve cap, if enacted, would have limited school districts to a reserve balance of not more than twice the state-required minimum reserve balance, or between 2 and 6 percent of the district’s general fund, depending on district size. With the SB 751 amendments, if the reserve cap ever becomes active:
- 2,500 ADA and below: Exempted (no limit on reserves)
- 2,501 to 30,000 ADA: Cap raised from 6 percent to 10 percent
- 30,001 to 400,000 ADA: Cap raised from 4 percent to 10 percent
- 400,001 ADA and above: Cap raised from 2 percent to 10 percent
- Establishing a new reserve cap “trigger,” making it significantly less likely that the current reserve cap would ever become active.
- Applying the higher cap only to the assigned and unassigned balances in the general fund and special reserve fund for other than capital outlay.
From the very beginning of our advocacy campaign to secure relief from the reserve cap, it was clear that there was a high level of awareness about the issue in the halls of the Capitol and in the media. This awareness is directly attributable to the advocacy efforts of governing board members statewide.
Hundreds of CSBA members sat face-to-face with legislators during Legislative Action Day meetings, and many went a step further by meeting with Senators and Assembly Members in their district offices. Countless CSBA members made phone calls and wrote letters – some made several calls and sent several messages on the same issue. At one point, some 800 board resolutions and letters were hand delivered to the Governor’s office by CSBA members. These efforts were what turned legislative awareness into a legislative solution.
I would like to personally thank every CSBA member who, for the sake of their students and a desire to preserve the budgeting authority of governing boards, took the time to advocate on this issue. Whether you took action once, twice or several times, each of you personally had a hand in achieving this result, and we could not have done it without your engagement.
Vernon M. Billy
CEO & Executive Director