Issue link: http://educator.cta.org/i/1544915
Eliminate 3-year budget manipulation California schools are unfairly required to budget for today 's students based on speculative three-year revenue projec- tions, a mandate only five other states impose. This practice allows school districts to claim financial hardship, hoard education funds in growing reserves and avoid spending on students and educators. Removing this requirement will ensure resources are used to give today 's students the quality education they deserve now. Background: AB 1200, signed into law in 1991, requires that school districts make three-year projections in their budget to ensure that they have the minimum reserve levels required by law to prevent insolvency. In practice, these projections frequently overestimate expenditures and underestimate revenue. Too often these inaccurate budget projections result in unnecessary cuts to school staffing and student supports, creating instability for students, educators and school communities. Decades of school district budget cycles and projections prove that three-year projections are highly unreliable when tested against what happens in California school districts. The large San Francisco Unified School District, for example, underestimated their revenues over a three- year period so that by the 2024–25 school year it had amassed $131 million dollars more in its reserves that what it had projected. During the same time period, medium-size Natomas Unified School District's reserves were $30 million more than what it had projected. Educators in both San Francisco and Natomas went on strike earlier this year to demand their districts invest these critical funds in today 's students and classrooms, rather than have them sit in reserve funds. "It's a weaponization of multi-year projections, and it really comes out in the third year," said United Educators of San Francisco (UESF) President Cassondra Curiel. "When our funds are based on projections that are underestimated, it causes the district to lean into an austerity narrative — school closures, other essentials that need to be cut. " The district had $300 million in a bank account at the time we went on strike. We won an agreement to spend this money." Statewide, school districts diverted an average of $30 mil- lion away from their classrooms into reserves in the 2024–25 school year — all due to the three-year budget manipulation. Average daily attendance (ADA, the days students are present divided by instructional days) is the primary way budgeting is determined. Districts control what assump- tions they build into their three-year projections, which are not open to stakeholder input. This lack of transparency undermines trust between districts and their educators and students/families. Our union is asking lawmakers to eliminate the three-year budgeting requirement and ensure ADA dollars are spent on today 's kids, not on reserves. San Francisco Unified's Reserve Fund 2022–2025: As a result of underestimating revenue and overestimating expenses, SF Unified's reserve fund was $131 million more than projected. UESF educators went on strike to demand that these funds be spent on today's students and classrooms. 6 43 S P R I N G 2 0 26