Many state school districts facing insolvency

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Based on school district budget plans filed three months ago, California’s Superintendent of Public Instruction Jack O'Connell says a record number of school districts aren’t likely to meet their financial obligations in the coming years.

One Southland school district, Lynwood Unified, is one of 14 statewide that predict they definitely won’t have enough money by the end of this fiscal year.

One hundred sixty school districts — 71 more than last year — say they may not have enough in the bank for the next three fiscal years. The list includes more than ten districts each in Riverside, San Bernardino, Los Angeles and Orange counties.

Superintendent O’Connell called these statements a preview of coming attractions.

"These reports do give us an early warning signal, a warning sign if you will, that a district might be headed towards financial disaster if they fail to make adjustments," he said.

Insolvency would lead to a state bailout of a school district and takeover by California’s Department of Education. O’Connell said it’s too early to tell how many districts may be in that situation by fall.

Many districts have feverishly slashed budgets in anticipation of large state funding cuts. The last school district budget filing for the fiscal year is due this week.

Many schools across the state have responded by increasing class sizes, eliminating summer school and laying off teachers, O'Connell told Patt Morrison today.

"Because the schools are operating today on $17 billion less than than we had anticipated two years ago, were seeing 16 percent of our districts that will not meet their financial obligations," O'Connell said.