Orange County school districts will have to shed an estimated $395 million when the first dollar goes into Proposition 2's School Account.  Some of this will be parcel and property tax collected by its community funded basic aid districts in Irvine, Laguna Beach and Newport-Mesa.  These districts will not be receive any more property tax until December of the year, presumably forcing them to borrow.

The cap will force the reduction of Orange County's school districts' local carryover funds from an average of 16% now, to just 5%.  Anaheim Union High, Capistrano Unified, Garden Grove Unified, and Santa Ana Unified will be capped at 4%.  Other districts will be capped at 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.  Orange County schools will be allowed to carry just $193 million forward.  

In the case of the community funded 'basic aid' districts, this means shedding property taxes from April's disbursement that won't be replenished until December.  Irvine Unified, for example, carried 21% forward -- about $48 million -- but that $48 million was needed to cover its August, September, October and November bills (Irvine expends about $221 million total each year).

In the case of the state funded districts, this will leave them extraordinarily vulnerable to state revenue or property tax swings.  They will be allowed only $164 million of the total, yet were owed $568 million at the end of 2012, $137 million at the end of 2013, and $245 million this June 30th.

Note that many districts are shown in red because the California Department of Education "qualified" its certification their financial conditions during some or all of the 2012-2014 period.  Despite their challenged financial state, these school districts would have to pay down $119 million of their total ongoing operating funds were the PSSSA to receive any deposits.

Orange data table

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