SB 1047, as introduced, Walters. Education finance: budgets: long-term obligations.
Existing law, on or before July 1 of each fiscal year, requires the county board of education to adopt an annual budget for the budget year and file the budget with the Superintendent of Public Instruction, the county board of supervisors, and the county auditor. Existing law requires the Superintendent to examine the budget, as specified, and, on or before August 15, approve or disapprove the budget.
This bill would authorize the Superintendent to disapprove the adopted budget of a county board of education if it does not disclose the long-term actuarial obligations of the county office of education, including, but not limited to, the debts and retiree obligations of the county office of education.
Existing law, on or before July 1 of each fiscal year, requires the governing board of a school district to, among other things, adopt a budget and file that budget with the county superintendent of schools within 5 days of the adoption or by July 1, whichever occurs first. Existing law requires the county superintendent of schools to examine the budget, as specified, and, on or before August 15, approve, conditionally approve, or disapprove the adopted budget.
This bill would authorize the county superintendent of schools to disapprove the adopted budget of a school district if it does not disclose the long-term actuarial obligations of the school district, including, but not limited to, the debts and retiree obligations of the school district.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1622 of the Education Code is amended
2to read:
(a) On or before July 1 of each fiscal year, the county
4board of education shall adopt an annual budget for the budget
5year and shall file the budget with the Superintendent, the county
6board of supervisors, and the county auditor. The budget, and
7supporting data, shall be maintained and made available for public
8review. The budget shall indicate the date, time, and location at
9which the county board of education held the public hearing
10required under Section 1620. For the 2014-15 fiscal year and each
11fiscal year thereafter, the county board of education shall not adopt
12a budget before the county board of education adopts a local control
13and accountability plan or approves an update to an existing local
14control and accountability plan if an existing local control and
15accountability plan or update to a local control and
accountability
16plan is not effective during the budget year. The county board of
17education shall not adopt a budget that does not include the
18expenditures identified in the local control and accountability plan
19and any annual update to the local control and accountability plan
20that will be effective in the subsequent fiscal year. Notwithstanding
21any other provision of this article, for the 2014-15 fiscal year and
22each fiscal year thereafter, the budget shall not be adopted or
23approved by the Superintendent before a local control and
24accountability plan or update to an existing local control and
25accountability plan for the budget year is approved.
26(b) (1) The Superintendent shall examine the budget to
27determine if it (A) complies with the standards and criteria adopted
28by the state board pursuant to Section 33127 for application to
29final local educational agency budgets, (B) allows the county office
30of education to meet its
financial obligations during the fiscal year,
31and (C) is consistent with a financial plan that will enable the
32county office of education to satisfy its multiyear financial
33commitments. In addition, the Superintendent shall identify any
P3 1technical corrections to the budget that must be made. On or before
2August 15, the Superintendent shall approve or disapprove the
3budget and, in the event of a disapproval, transmit to the county
4office of education in writing his or her recommendations regarding
5revision of the budget and the reasons for those recommendations.
6(2) The Superintendent may disapprove the adopted budget of
7a county board of education if it does not disclose the long-term
8actuarial obligations of the county office of education, including,
9but not limited to, the debts and retiree obligations of the county
10office of education.
11(2)
end delete
12begin insert(3)end insert For the 2011-12 fiscal year, notwithstanding any of the
13standards and criteria adopted by the state board pursuant to Section
1433127, the Superintendent, as a condition on approval of a county
15office of education budget, shall not require a county office of
16education to project a lower level of revenue per unit of average
17daily attendance than it received in the 2010-11 fiscal year nor
18require the county superintendent to certify in writing whether or
19not the county office of education is able to meet its financial
20obligations for the two subsequent fiscal years.
21(3)
end delete
22begin insert(4)end insert For the 2014-15 fiscal year and each fiscal year thereafter,
23the Superintendent shall disapprove a budget if any of the following
24occur:
25(A) The Superintendent has not approved a local control and
26accountability plan or an annual update to the local control and
27accountability plan filed by a county superintendent of schools
28pursuant to Section 52067.
29(B) The Superintendent determines that the budget does not
30include the expenditures necessary to implement the local control
31and accountability plan or an annual update to the local control
32and accountability plan that is effective for that budget year.
33(c) On or before September 8, the county board of education
34shall revise the county office of education budget to reflect changes
35in projected income or expenditures subsequent to July 1, and to
36include
any response to the recommendations of the
37Superintendent, shall adopt the revised budget, and shall file the
38revised budget with the Superintendent, the county board of
39supervisors, and the county auditor. Before revising the budget,
40the county board of education shall hold a public hearing regarding
P4 1the proposed revisions, which shall be made available for public
2inspection not less than three working days before the hearing.
3The agenda for that hearing shall be posted at least 72 hours before
4the public hearing and shall include the location where the budget
5will be available for public inspection. The revised budget, and
6supporting data, shall be maintained and made available for public
7review.
8(d) (1) The Superintendent shall examine the revised budget
9to determine if it complies with the standards and criteria adopted
10by the state board pursuant to Section 33127 for application to
11final local educational agency
budgets and, no later than October
128, shall approve or disapprove the revised budget. For the 2014-15
13fiscal year and each fiscal year thereafter, the Superintendent shall
14disapprove a revised budget if the Superintendent determines that
15the revised budget does not include the expenditures necessary to
16implement the local control and accountability or an annual update
17to the local control and accountability plan approved by the
18Superintendent pursuant to Section 52067. If the Superintendent
19disapproves the budget, he or she shall call for the formation of a
20budget review committee pursuant to Section 1623. For the
212011-12 fiscal year, notwithstanding any of the standards and
22criteria adopted by the state board pursuant to Section 33127, the
23Superintendent, as a condition on approval of a county office of
24education budget, shall not require a county office of education to
25project a lower level of revenue per unit of average daily attendance
26than it received in the 2010-11 fiscal year nor require the county
27
superintendent to certify in writing whether or not the county office
28of education is able to meet its financial obligations for the two
29subsequent fiscal years.
30(2) Notwithstanding any other law, for the 2014-15 fiscal year
31and each fiscal year thereafter, if the Superintendent disapproves
32the budget for the sole reason that the Superintendent has not
33approved a local control and accountability plan or an annual
34update to the local control and accountability plan filed by the
35county superintendent of schools pursuant to Section 52067, the
36Superintendent shall not call for the formation of a budget review
37committee pursuant to Section 1623.
38(e) Notwithstanding any other provision of this section, the
39budget review for a county office of education shall be governed
40by paragraphs (1), (2), and (3) of this subdivision, rather than by
P5 1subdivisions (c) and (d), if the county board of
education so elects,
2and notifies the Superintendent in writing of that decision, no later
3than October 31 of the immediately preceding calendar year.
4(1) In the event of the disapproval of the budget of a county
5office of education pursuant to subdivision (b), on or before
6September 8, the county superintendent of schools and the county
7board of education shall review the recommendations of the
8Superintendent at a regularly scheduled meeting of the county
9board of education and respond to those recommendations. That
10response shall include the proposed actions to be taken, if any, as
11a result of those recommendations.
12(2) begin deleteNo later than end deletebegin insertOn or before end insertOctober 8, after receiving the
13response
required under paragraph (1), the Superintendent shall
14review that response and either approve or disapprove the budget
15of the county office of education. For the 2014-15 fiscal year and
16each fiscal year thereafter, the Superintendent shall disapprove a
17budget if the Superintendent determines that the budget adopted
18by the county board of education does not include the expenditures
19necessary to implement the local control and accountability plan
20or an annual update to the local control and accountability plan
21approved by the Superintendent pursuant to Section 52067. Except
22as provided in paragraph (2) of subdivision (d), if the
23Superintendent disapproves the budget, he or she shall call for the
24formation of a budget review committee pursuant to Section 1623.
25(3) Not later than 45 days after the Governor signs the annual
26Budget Act, the county office of education shall make available
27for public review any revisions in revenues and expenditures
that
28it has made to its budget to reflect the funding made available by
29that Budget Act.
Section 42127 of the Education Code is amended to
31read:
(a) On or before July 1 of each year, the governing
33board of each school district shall accomplish the following:
34(1) Hold a public hearing on the budget to be adopted for the
35subsequent fiscal year. The budget to be adopted shall be prepared
36in accordance with Section 42126. The agenda for that hearing
37shall be posted at least 72 hours before the public hearing and shall
38include the location where the budget will be available for public
39inspection.
P6 1(A) For the 2011-12 fiscal year, notwithstanding any of the
2standards and criteria adopted by the state board pursuant to Section
333127, each school district budget shall project the same level of
4revenue per unit of average daily attendance as it received
in the
52010-11 fiscal year and shall maintain staffing and program levels
6commensurate with that level.
7(B) For the 2011-12 fiscal year, the school district shall not be
8required to demonstrate that it is able to meet its financial
9obligations for the two subsequent fiscal years.
10(2) Adopt a budget. Not later than five days after that adoption
11or by July 1, whichever occurs first, the governing board of the
12school district shall file that budget with the county superintendent
13of schools. The budget and supporting data shall be maintained
14and made available for public review. If the governing board of
15the school district does not want all or a portion of the property
16tax requirement levied for the purpose of making payments for the
17interest and redemption charges on indebtedness as described in
18paragraph (1) or (2) of subdivision (b) of Section 1 of Article
19XIII A of the California Constitution, the budget shall include a
20statement of the amount or portion for which a levy shall not be
21made. For the 2014-15 fiscal year and each fiscal year thereafter,
22the governing board of the school district shall not adopt a budget
23before the governing board of the school district adopts a local
24control and accountability plan, if an existing local control and
25accountability plan or annual update to a local control and
26accountability plan is not effective for the budget year. The
27governing board of a school district shall not adopt a budget that
28does not include the expenditures necessary to implement the local
29control and accountability plan or the annual update to a local
30control and accountability plan that is effective during the
31subsequent fiscal year.
32(b) The county superintendent of schools may accept changes
33in any statement included in the budget, pursuant to subdivision
34(a), of the
amount or portion for which a property tax levy shall
35not be made. The county superintendent of schools or the county
36auditor shall compute the actual amounts to be levied on the
37property tax rolls of the school district for purposes that exceed
38apportionments to the school district pursuant to Chapter 6
39(commencing with Section 95) of Part 0.5 of Division 1 of the
40Revenue and Taxation Code. Each school district shall provide all
P7 1data needed by the county superintendent of schools or the county
2auditor to compute the amounts. On or before August 15, the
3county superintendent of schools shall transmit the amounts
4computed to the county auditor who shall compute the tax rates
5necessary to produce the amounts. On or before September 1, the
6county auditor shall submit the rate computed to the board of
7supervisors for adoption.
8(c) The county superintendent of schools shall do all of the
9following:
10(1) Examine the adopted budget to determine whether it
11complies with the standards and criteria adopted by the state board
12pursuant to Section 33127 for application to final local educational
13agency budgets. The county superintendent of schools shall
14identify, if necessary, technical corrections that are required to be
15made to bring the budget into compliance with those standards
16and criteria.
17(2) Determine whether the adopted budget will allow the school
18district to meet its financial obligations during the fiscal year and
19is consistent with a financial plan that will enable the school district
20to satisfy its multiyear financial commitments. In addition to his
21or her own analysis of the budget of each school district, the county
22superintendent of schools shall review and consider studies, reports,
23evaluations, or audits of the school district that were commissioned
24by the school district, the county superintendent of schools, the
25
Superintendent, and state control agencies and that contain
26evidence that the school district is showing fiscal distress under
27the standards and criteria adopted in Section 33127 or that contain
28a finding by an external reviewer that more than 3 of the 15 most
29common predictors of a school district needing intervention, as
30determined by the County Office Fiscal Crisis and Management
31Assistance Team, are present. The county superintendent of schools
32shall either conditionally approve or disapprove a budget that does
33not provide adequate assurance that the school district will meet
34its current and future obligations and resolve any problems
35identified in studies, reports, evaluations, or audits described in
36this paragraph.
37(3) Determine whether the adopted budget includes the
38expenditures necessary to implement the local control and
39accountability plan or annual update to the local control and
P8 1accountability plan approved by the county
superintendent of
2schools.
3(d) (1) On or before August 15, the county superintendent of
4schools shall approve, conditionally approve, or disapprove the
5adopted budget for each school district. For the 2014-15 fiscal
6year and each fiscal year thereafter, the county superintendent of
7schools shall disapprove a budget if the county superintendent of
8schools determines that the budget does not include the
9expenditures necessary to implement a local control and
10accountability plan or an annual update to the local control and
11accountability plan approved by the county superintendent of
12schools. If a school district does not submit a budget to the county
13superintendent of schools, the county superintendent of schools
14shall develop, at school district expense, a budget for that school
15district by September 15 and transmit that budget to the governing
16board of the school district. The budget prepared by the county
17superintendent of
schools shall be deemed adopted, unless the
18county superintendent of schools approves any modifications made
19by the governing board of the school district. The approved budget
20shall be used as a guide for the school district’s priorities. The
21Superintendent shall review and certify the budget approved by
22the county. If, pursuant to the review conducted pursuant to
23subdivision (c), the county superintendent of schools determines
24that the adopted budget for a school district does not satisfy
25paragraph (1), (2), or (3) of that subdivision, he or she shall
26conditionally approve or disapprove the budget and, not later than
27August 15, transmit to the governing board of the school district,
28in writing, his or her recommendations regarding revision of the
29budget and the reasons for those recommendations, including, but
30not limited to, the amounts of any budget adjustments needed
31before he or she can approve that budget. The county
32superintendent of schools may assign a fiscal adviser to assist the
33school district to
develop a budget in compliance with those
34revisions. In addition, the county superintendent of schools may
35appoint a committee to examine and comment on the
36superintendent’s review and recommendations, subject to the
37requirement that the committee report its findings to the county
38superintendent of schools no later than August 20. For the 2011-12
39fiscal year, notwithstanding any of the standards and criteria
40adopted by the state board pursuant to Section 33127, the county
P9 1superintendent of schools, as a condition on approval of a school
2district budget, shall not require a school district to project a lower
3level of revenue per unit of average daily attendance than it
4received in the 2010-11 fiscal year nor require the school district
5to demonstrate that it is able to meet its financial obligations for
6the two subsequent fiscal years.
7(2) Notwithstanding any other provision of this article, for the
82014-15 fiscal year and each fiscal year
thereafter, the budget
9shall not be adopted or approved by the county superintendent of
10schools before a local control and accountability plan or update to
11an existing local control and accountability plan for the budget
12year is approved.
13(3) The county superintendent of schools may disapprove the
14adopted budget of a school district if it does not disclose the
15long-term actuarial obligations of the school district, including,
16but not limited to, the debt and retiree obligations of the school
17district.
18(e) On or before September 8, the governing board of the school
19district shall revise the adopted budget to reflect changes in
20projected income or expenditures subsequent to July 1, and to
21include any response to the recommendations of the county
22superintendent of schools,
shall adopt the revised budget, and shall
23file the revised budget with the county superintendent of schools.
24Before revising the budget, the governing board of the school
25district shall hold a public hearing regarding the proposed revisions,
26to be conducted in accordance with Section 42103. In addition, if
27the adopted budget is disapproved pursuant to subdivision (d), the
28governing board of the school district and the county
29superintendent of schools shall review the disapproval and the
30recommendations of the county superintendent of schools regarding
31revision of the budget at the public hearing. The revised budget
32and supporting data shall be maintained and made available for
33public review.
34(1) For the 2011-12 fiscal year, notwithstanding any of the
35standards and criteria adopted by the state board pursuant to Section
3633127, each school district budget shall project the same level of
37revenue per unit of average daily attendance as it received
in the
382010-11 fiscal year and shall maintain staffing and program levels
39commensurate with that level.
P10 1(2) For the 2011-12 fiscal year, the school district shall not be
2required to demonstrate that it is able to meet its financial
3obligations for the two subsequent fiscal years.
4(f) On or before September 22, the county superintendent of
5schools shall provide a list to the Superintendent identifying all
6school districts for which budgets may be disapproved.
7(g) (1) The county superintendent of schools shall examine the
8revised budget to determine whether it (1) complies with the
9standards and criteria adopted by the state board pursuant to Section
1033127 for application to final local educational agency budgets,
11(2) allows the school district to meet its financial obligations during
12the fiscal
year, (3) satisfies all conditions established by the county
13superintendent of schools in the case of a conditionally approved
14budget, and (4) is consistent with a financial plan that will enable
15the school district to satisfy its multiyear financial commitments,
16and, not later than October 8, shall approve or disapprove the
17revised budget. If the county superintendent of schools disapproves
18the budget, he or she shall call for the formation of a budget review
19committee pursuant to Section 42127.1, unless the governing board
20of the school district and the county superintendent of schools
21agree to waive the requirement that a budget review committee be
22formed and the department approves the waiver after determining
23that a budget review committee is not necessary. Upon the grant
24of a waiver, the county superintendent of schools immediately has
25the authority and responsibility provided in Section 42127.3. Upon
26approving a waiver of the budget review committee, the department
27shall ensure that a balanced budget
is adopted for the school district
28by November 30. If no budget is adopted by November 30, the
29Superintendent may adopt a budget for the school district. The
30Superintendent shall report to the Legislature and the Director of
31Finance by December 10 if any school district, including a school
32district that has received a waiver of the budget review committee
33process, does not have an adopted budget by November 30. This
34report shall include the reasons why a budget has not been adopted
35by the deadline, the steps being taken to finalize budget adoption,
36the date the adopted budget is anticipated, and whether the
37Superintendent has or will exercise his or her authority to adopt a
38budget for the school district. For the 2011-12 fiscal year,
39notwithstanding any of the standards and criteria adopted by the
40state board pursuant to Section 33127, the county superintendent
P11 1of schools, as a condition on approval of a school district budget,
2shall not require a school district to project a lower level of revenue
3per unit
of average daily attendance than it received in the 2010-11
4fiscal year nor require the school district to demonstrate that it is
5able to meet its financial obligations for the two subsequent fiscal
6years.
7(2) Notwithstanding any other law, for the 2014-15 fiscal year
8and each fiscal year thereafter, if the county superintendent of
9schools disapproves the budget for the sole reason that the county
10superintendent of schools has not approved a local control and
11accountability plan or an annual update to the local control and
12accountability plan filed by the school district pursuant to Section
1352061, the county superintendent of schools shall not call for the
14formation of a budget review committee pursuant to Section
1542127.1.
16(h) begin deleteNot later than end deletebegin insertOn
or before end insertOctober 8, the county
17superintendent of schools shall submit a report to the
18Superintendent identifying all school districts for which budgets
19have been disapproved or budget review committees waived. The
20report shall include a copy of the written response transmitted to
21each of those school districts pursuant to paragraph (1) of
22subdivision (d).
23(i) Notwithstanding any other provision of this section, the
24budget review for a school district shall be governed by paragraphs
25(1), (2), and (3), rather than by subdivisions (e) and (g), if the
26governing board of the school district so elects and notifies the
27county superintendent of schools in writing of that decision, not
28later than October 31 of the immediately preceding calendar year.
29On or before July 1, the governing board of a school district for
30which the budget review is governed by this subdivision, rather
31than by subdivisions (e) and (g), shall conduct a
public hearing
32regarding its proposed budget in accordance with Section 42103.
33(1) If the adopted budget of a school district is disapproved
34pursuant to subdivision (d), on or before September 8, the
35governing board of the school district, in conjunction with the
36county superintendent of schools, shall review the superintendent’s
37recommendations at a regular meeting of the governing board of
38the school district and respond to those recommendations. The
39response shall include any revisions to the adopted budget and
P12 1other proposed actions to be taken, if any, as a result of those
2recommendations.
3(2) On or before September 22, the county superintendent of
4schools shall provide a list to the Superintendent identifying all
5school districts for which a budget may be tentatively disapproved.
6(3) Not later than October 8,
after receiving the response
7required under paragraph (1), the county superintendent of schools
8shall review that response and either approve or disapprove the
9budget. Except as provided in paragraph (2) of subdivision (g), if
10the county superintendent of schools disapproves the budget, he
11or she shall call for the formation of a budget review committee
12pursuant to Section 42127.1, unless the governing board of the
13school district and the county superintendent of schools agree to
14waive the requirement that a budget review committee be formed
15and the department approves the waiver after determining that a
16budget review committee is not necessary. Upon the grant of a
17waiver, the county superintendent has the authority and
18responsibility provided to a budget review committee in Section
1942127.3. Upon approving a waiver of the budget review committee,
20the department shall ensure that a balanced budget is adopted for
21the school district by November 30. The Superintendent shall
22report to the Legislature and the
Director of Finance by December
2310 if any school district, including a school district that has received
24a waiver of the budget review committee process, does not have
25an adopted budget by November 30. This report shall include the
26reasons why a budget has not been adopted by the deadline, the
27steps being taken to finalize budget adoption, and the date the
28adopted budget is anticipated. For the 2011-12 fiscal year,
29notwithstanding any of the standards and criteria adopted by the
30state board pursuant to Section 33127, the county superintendent
31of schools, as a condition on approval of a school district budget,
32shall not require a school district to project a lower level of revenue
33per unit of average daily attendance than it received in the 2010-11
34fiscal year nor require the school district to demonstrate that it is
35able to meet its financial obligations for the two subsequent fiscal
36years.
37(4) Not later than 45 days after the Governor signs
the annual
38Budget Act, the school district shall make available for public
39review any revisions in revenues and expenditures that it has made
P13 1to its budget to reflect the funding made available by that Budget
2Act.
3(j) Any school district for which the county board of education
4serves as the governing board of the school district is not subject
5to subdivisions (c) to (h), inclusive, but is governed instead by the
6budget procedures set forth in Section 1622.
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