Print this Article

The Death of AB 1200?

By Paul Disario, Ed.D. - January 2, 2009

In 1991, a landmark bill called AB 1200 was enacted, after the bankruptcy of Richmond school district in 1990.

AB 1200 was a way of substituting state fiscal oversight for money.  California schools – mired at the bottom of the national ranking of states for in-school spending – were told to keep their finances in order, or face county office and state intervention or takeover.  California’s FCMAT (Fiscal Crisis & Management Assistance Team) was the child of AB 1200, a new state agency to keep an eye on districts’ fiscal health.  It worked . .  until now.

As state government lurched into insolvency in 2007 and 2008, AB 1200 has become increasingly difficult to enforce.  AB 1200 was always a “do as I say” instruction from the state to local district, not a “do as I do” mandate.  The state ran deficits year after year, while telling schools to manage their finances properly.  Legislators became incensed when the Vallejo school district went bankrupt and then proceeded to run massive deficits.

Now the state is proposing mid-year budget cuts which will take away school district reserves as they reduce textbook revenue and other dollars already spent on mandated state curriculum.

When faced with mid-year cuts of funds already expended, how can a school district project finances for 3 years in the future?  Districts will be coping with a state imposed deficit and hope to have enough cash for next week’s payroll.

County offices of education, which monitor the finances of local school districts, are trying to provide guidance, but they are hopelessly handicapped.  They have no guidance from the state, from FCMAT or anyone.  In one district, the County Office called, professing concern about cash which resulted in the business office freezing vacant positions and purchase orders.  What about student outcomes?  Is there a plan?  Are we in panic?

Yes.  We are adrift on a sea of panic.

This is not the best way to do things. So what should we do?

Make a plan that makes sense for kids, and tries to get us into the future.

  1. We must develop a realistic plan that:
    1. Conserves cash to pay vendors and employees
    2. Reduces expenses by at least 10%
    3. Negotiates changes in union contracts to either reduce salaries or increase class size or both
    4. Preserves the core education program
    5. Implements efficiencies in bussing, warehousing, cleaning, etc.
  2. Do not worry about AB 1200.  We need to get through the next 18 months.  File whatever report one must, but do not worry about it.
  3. Use the reserves that you haven’t been able to touch (until now) to soften the blow.  Why would schools maintain billions in reserves during this unprecedented crisis?  Spend them down, and restore them later.

Above all, focus on a plan that gets your district through this crisis, and into the future.

Editor's Note: Dr. Paul Disario is Director of District Support Services for educational consulting firm Total School Solutions.