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Friday, Jun 19 2009 05:32 PM

Educators warn against "Enron accounting"

BY JEFF NACHTIGAL, Californian staff writer jnachtigal@bakersfield.com

The last time school superintendents called a press conference to lobby about state legislation was more than decade ago, in a successful push for special education funding.

On Friday, four superintendents decried two new state budget proposals they say would loosen fiscal accountability.

One proposal from the Budget and Finance Committee would reduce the required amount of savings districts set aside each year from 3 to 1 percent.

The other would allow districts to spend one-time federal stimulus funding, but not get dinged if their budgets don't pass muster when the federal money runs out. Superintendents are concerned that with these changes, school boards may be pressured to spend one-time federal stimulus dollars, and dip into their savings accounts to retain teachers or programs in the short term.

The federal stimulus funds must be spent by 2011.

Many school districts are planning to stretch the federal funding through the 2011-12 school year.

Kern County Superintendent of Schools Larry E. Reider said the changes amounted to "Enron accounting."

"I don't see local districts getting in trouble, but this enables other districts in the state to make bad decisions," Reider said.

And if schools make bad financial decisions, that could lead to the state loaning out millions to bail them out, and a loss of public trust in education, he said.

"This is being driven by groups that would rather see the money spent now, than worry about saving the money for later," said Michael Hulsizer, legislative affairs director for the Kern County Office of Education.

State Sen. Dean Florez, D-Shafter, asked why superintendents were turning down more local control over budgets.

"For folks that want flexibility from Sacramento, why all the control talk for local districts?" Florez said by e-mail.

"Nothing tells them or their boards to spend," Florez said.

State Sen. Roy Ashburn, R-Bakersfield, said he was "completely opposed" to both proposals.

Lowering reserves was just another form of borrowing, and relaxing the oversight on budgets was contrary to the public demanding greater accountability to monies, he said.

The reserve minimum has in the past been temporarily lowered, most recently in 2003 when it dropped to 1.5 percent. But no Kern County districts dropped to that level, said Hulsizer.

The state is doing this under the guise of flexibility, but it should not take the place of accountability, Rosedale Union School District Jamie Henderson said.

Kern High Superintendent Don Carter said he favored more spending flexibility when it comes to books or honors classes or adult school funding, but his "philosophical opposition" was to changes that could undercut fiscal responsibility in school districts.

Carter said Kern High schools wouldn't see any effect from the changes, if enacted when the state legislature votes on the budget.

The proposals would change the "law of the land," and allow new pressure from legislators or interest groups that would affect schools, said Mike Lingo, superintendent of the Bakersfield City School District.

"I have found that once you make cuts, you don't have a chance to restore those cuts," he said.

"The whole issue is about temporary funding," Lingo said.

Ashburn predicted the proposals wouldn't get the two-thirds majority vote needed to pass and if they did, Gov. Arnold Schwarzenegger would veto them.

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