New State Study Links Distressed School Districts to “ineffective leadership”

A study released on January 21, 2020 by the California Legislative Analyst’s Office provides a fairly detailed, yet concise, overview of financial trends of the nearly 1000 school districts that operate in California. You can find the study here.

Sac City is identified as one of only 30 “fiscally distressed” school districts out of nearly 1000 districts in the state. 

According to the report, “The vast majority of districts in California have positive budget ratings.”  Last year, only 5 out of nearly 1000 received a “negative” rating, an additional 27 received a “qualified” rating.  (p. 11)

What sets the 99% of positive districts apart from an outlier like Sac City?

“ . . . many districts are well managed, with a consistent focus on good management practices.  Most districts, for example, have accurate budget projections and deliberately plan for cost increases in key areas such as pensions and special education.” (p.11).

For distressed districts, “Another common characteristic is a lack of fiscal expertise.  Chronically distressed districts often make poor budget projections. . . . Although all districts in the state face fiscal pressures, chronically distressed districts—with deadlocked, inconsistent, and otherwise ineffective leadership—are less likely to have the tools needed to respond to these challenges.” (p. 12).

There are few other notable observations: 

• Growing special education costs are a major cost driver for school districts; (pp. 4, 8).
• salaries for teachers are likely to continue to increase because of the increased cost of living in California; (p. 9).
• District will continue to need to add counselor, psychologists and other staff to support students with special needs, particularly as autism rates continue to increase; (p.8).
• Teacher pension costs are expected to level off; (p. 10).
• “Approximately half of teachers and other certificated employees participate in a health plan for which the district pays 100 percent of the premium.” (p. 5)
• For retiree health benefits, “most districts cover the costs of these benefits on a pay-as-you go basis, with only a few districts pre-funding benefits as employees earn them.” (p.5).