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Governor Signs Deferral Pre-Payment Bill, AB 191

By Vernon Billy - June 24, 2010

As we recently reported, (See June 17, 2010 EdBrief article Budget Conference Committee Takes Few Action on Education Funding) the legislature’s Budget Conference Committee announced that they were planning to introduce legislation that would speed up some deferral payments to school districts.

The legislature did approve AB 191, which proposes to pay a portion of the July deferral payment in June.  AB 191 was signed by the Governor on Wednesday.

AB 191 authorizes the California Department of Education (CDE) to pay up to $800 million of the P-2 payment in June, instead of July.  The remaining balance of the payment should be made in July.

While this is positive news, it is important to remember that previously enacted legislation – AB8x 14 – authorized up to $2.5 billion in payments for July be deferred up to 60 days. This legislation also authorizes the October 2010 payment to be deferred for 90 days in the amount of $2.5 billion.

In addition, the March 2011 payment is scheduled to be deferred until April 2011 in the amount of $2.5 billion.

Government Code §16325.5 (e) authorizes the Controller, Treasurer and Director of Finance to change the dates of these deferrals by paying these deferrals either a month earlier or a month later than scheduled.

Editor's Note:  Vernon M. Billy is president of Governmental Solutions Group, LLC (GSG) a Sacramento-based consulting and legislative advocacy firm. GSG serves public and private education organizations, non-profit organizations and private sector companies.