Monterey County school districts will have to shed an estimated $88 million when the first dollar goes into Proposition 2's School Account.  This will force the reduction of Monterey school districts' local carryover funds from an average of 22% now, to just 6%.

Compare these allowed carryovers with California Department of Education and Government Finance Officers Association recommendations of 15-17% in reserves -- and the state's late payments to schools in all recent fiscal years. Monterey County schools will be allowed to carry just $34 million forward.

Even more irrationally, the two community-funded districts in the county, Carmel and Pacific Grove Unified, would be forced to spend down over $20 million of property taxes that they need for fall operations. Property and parcel taxes are disbursed in April and December (when the semi-annual installments are paid by taxpayers). So April's disbursement has to fund August, September, October and November expenditures. These funds would have to borrowed, substituting debt service costs for instructional investments.

And, when the next downturn hits, Monterey County districts will have almost no cushion -- $34 million wouldn't cover any of the State's recent deferrals.  The State had not paid Monterey County districts $95 million it owed them in June 2012, $50 million in June 2013, and $36 million just this June 30th, a few months ago (incidentally, two fiscal years after Prop 30 passed).

Districts would have been unable to fund these internally; instead they would have had to borrow or slash instruction.

Note that two of the districts are shown in red because the California Department of Education qualified its certification of these districts' financial condition as Negative during some or all of the 2012-2014 period. Despite their challenged financial state, these financially challenged districts will have to spend $450,000 of their ongoing operating funds when the state's school 'savings' account receives any deposits.

Monterey data table

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