SB 751: School finance: school districts: annual budgets: reserve balance.

Existing law, unless the school district is granted an exemption, limits the amount of the combined assigned or unassigned ending fund balance contained in a school districts annual budget in any fiscal year immediately after a fiscal year in which a transfer is made into the Public School System Stabilization Account. Existing law establishes formulas for calculating the maximum amount allowable for school districts with less than 400,000 units of average daily attendance and for school districts with more than 400,000 units of average daily attendance, as specified.

This bill would instead make that limitation applicable in a fiscal year immediately after a fiscal year in which the amount of moneys in the Public School System Stabilization Account is equal to or exceeds 3% of the combined total of General Fund revenues appropriated for school districts and allocated local proceeds of taxes, as specified, for that fiscal year. The bill would instead provide that the school districts budget shall not contain a combined assigned or unassigned ending general fund balance, as defined, in excess of 10% of those funds. The bill would exclude from the requirements of those provisions basic aid school districts, as defined, and small school districts, as defined. To the extent the bill would impose additional duties on school districts, the bill would impose a state-mandated local program.

The bill would require the Superintendent of Public Instruction to notify school districts and county offices of education whenever the conditions specified above are met. The bill would also require the Superintendent to notify school districts and county offices of education when those conditions no longer exist.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.