San Diego Unified School District Discusses Risk of Insolvency

Courtney Williams's picture
Friday, October 28, 2011

Parents, teachers and students sitting in on a packed meeting of the San Diego Unified School District got a "big picture" look at the financial crisis facing the state's second largest school district.

While some parents were there to argue against school closures and against cuts to transportation, the bulk of the meeting involved the future of the district.

Financial adviser Ron Bennett painted a grim picture because California's economy is growing at a much slower rate than hoped.

After five years of cuts, school leaders say that no amount of layoffs or cutbacks could make up for the projected $118 million gap in state funding this year.

Proposition 98 requires that a minimum portion of the state's budget goes to schools but that amount varies from year to year, depending on what the state has to work with.

With the state still in the thick of its financial problems, Bennett told the board the district will be making cuts every year until this economic crisis is over.

And the word insolvency and a possible takeover by the state are now being talked about as real possibilities.

The state of California cannot allow a school district to go belly up. So to help the board and the public realize the financial situation facing the district, Bennett walked through the steps of bankruptcy.

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