|State Causes Local Students to
April 25, 2004
For anyone who might have missed it, an editorial from the April 23 San Francisco Chronicle is reproduced below. It emphasizes the absurdity with which the State is treating the WCCUSD “debt” that is now over a decade old and which has cost the children of West Contra Costa County millions of dollars in lost educational opportunities.
My children were attending school in what was formerly the Richmond Unified School District in 1991 when the District ran out of money and closed six weeks before the normal end of the school term. With the help of a public interest law firm (Lawyers Committee for Civil Rights) and a sympathetic large private law firm (Morrison & Foerster), we joined a group of parents in suing the State of California. Not only did we win a temporary injunction that forced the State to provide funding to complete the school year, we also won a California Supreme Court decision that set a new legal standard for the State’s obligation for school funding. Because my name was the first in alphabetical order of the plaintiff parents’ names, the suit became known as “Butt v. State of California.”
The State argued in part that Serrano established the State’s responsibility to fairly apportion revenues at the beginning of each school year—not that the State could be constitutionally liable for the mismanagement of those funds by local officials. The 1992 Butt decision found that the "…State itself bears the ultimate authority and responsibility to ensure that its district-based system of common schools provides basic equality of educational opportunity" (Butt v. State of California, Dec. 1992), and resulted in the State’s paying for the district in question to complete its six weeks of instruction. By unequivocally establishing the State’s responsibility to provide education freely and equally without exception for any actions by local officials, this case eliminated the possibility of total local control. The Butt decision remains the high water mark in education litigation (just Google “Butt v. State of California”), but it has failed to eliminate inequities, such as the outstanding WCCUSD loan.
After establishing the State’s obligation to provide equitable education opportunity for all students, it is incomprehensible that WCCUSD students who were not even born in 1991 are still paying a usurious interest rate (not to mention the principal) for a debt that should have discharged by the State long ago. This legal requirement for educational equity continues to be ignored by California governor after governor. More and more school districts are, like Richmond in 1991, giving up “local” control to take State bailout loans. All are in communities challenged by low income and non-English speaking demographics. We have yet to see a school district in a wealthy community throw in the towel. Is that educational equity?
Perhaps help is on the way with a lawsuit filed in 2000, Williams v. State of California, which asserts that thousands of California students are "deprived of essential educational opportunities to learn" because their schools lack qualified teachers, instructional materials, and clean, safe facilities, and asks the courts to decide what kind of responsibility the state has to provide an adequate level of educational services.
The outstanding balance on the WCCUSD loan should not just be refinanced, it should be wiped out, and the State should be required to provide the District sufficient funds to operate libraries and provide sports and counselors just like the wealthy districts.
Governor: Help Richmond schools
Friday, April 23, 2004
THE STRUGGLING West Contra Costa County school district could save $600,000 a year if Gov. Arnold Schwarzenegger simply gave it permission to refinance a bailout loan it received from the state more than a dozen years ago.
But Schwarzenegger is refusing to do so, making a mockery of his frequent declarations that the education of California's children is his No. 1 priority.
In 1991, the district, which includes the Richmond schools, faced bankruptcy. It then received a bail-out loan from the state of $28.5 million - - with a 5.7 percent interest rate -- to stay afloat.
Each year since then, the district has had to pay $1.8 million in interest and principal -- a payment it will have to continue making for the next 14 years until the loan is paid off. This past year it paid $ 1 million in interest charges alone.
The interest is based on the short-term interest rates the state receives from funds in its $50 billion "pooled money investment account" -- funds the state receives from a range of sources and has not yet spent. Like other interest rates, it fluctuates. It is now at an all-time low of 1.5 percent.
While the West Contra Costa school district continues to pay a 5.7 percent interest rate, other school districts facing bankruptcy will pay far less. The Vallejo school district is expected to receive a $60 million bailout loan, with an interest rate of around 1.5 percent. Last year, Oakland received a $65 million bailout loan, with a 1.8 percent interest rate.
Yet Schwarzenegger administration officials are insisting that they won't allow West Contra Costa to refinance its far smaller loan, with an interest rate nearly four times higher. Instead, a spokesman for Donna Arduin, the governor's finance director, says Jack O'Connell, the state superintendent of public instruction, should sit down with the West Contra Costa school board and work out a long-term plan for fiscal viability.
That proposal is not tied to reality in any way. The district already has a state-appointed trustee, Fred Stewart, who oversees the district's finances. The only reason O'Connell would get involved is if the district were facing bankruptcy again. But that is not the case. Instead, it is planning to eliminate its $16 million budget deficit by making deep cuts in library, sports, music and other programs, in addition to potential layoffs of hundreds of teachers.
In effect, the state is making money from the interest it is squeezing out of the district -- and hurting children at the same time.
"These students should not have to pay for mistakes made by a group of adults over a decade ago, none of whom are around any longer," said Assemblywoman Loni Hancock, D-Berkeley, who has taken the lead in pressing Schwarzenegger officials to change the onerous terms of the loan.
The West Contra Costa schools should be allowed to refinance their loan - - just as any responsible homeowner would do. It won't solve the district's financial problems, but it will help enormously. Schwarzenegger should change course and let them do it.