Proposition 30 and the Education Protection Account
With the passage of Proposition 30 and the creation of the Education Protection
Account, the State put into action another one of its creative ways to keep money
in their coffers and protect their cash flow while making it look like schools are
getting more money than in the past.
Typically, a school district is supposed to receive its funding on a 5-5-9 schedule.
This means that in July and August, the District receives 5% of its annual revenue
limit and in each of the months following, the District receives 9%. Of course,
with the deferrals of the past several years, this schedule has changed with some
months being as low as 0%. Now with the advent of the Education Protection
Account, the State is withholding an additional 20% of each apportionment and
placing it in an account that will be distributed to schools in June…at the end of
the fiscal year. In future years, these funds will be distributed on a quarterly
basis.
In addition to keeping funds that should be directly passed through to districts,
there are new strings attached to these funds. The District cannot spend any of
the Education Protection Account funds on salaries or benefits for administrators
or any other administrative cost. On the surface, this sounds reasonable until you
consider the fact that these funds were meant to backfill those funds from the
revenue limit calculation that were going to be cut without the passage of
Proposition 30. Revenue Limit funds are unrestricted and can be spent on any
expense that a district incurs.
To meet the requirements of the new law, the District must discuss how it is going
to spend these funds in an open public meeting, pass a resolution that recognizes
the use of these funds and then post on its website a schedule of how the funds
will be spent. Usually, this will be done at the same meeting in June at which the
District adopts its budget for the following year. However, this step must also be
taken for the 2012-2013 fiscal year, and the State has just given direction for
following the new law.
At the board meeting on April 2, 2013, the Board determined how these funds
will be spent and passed a resolution to use these funds to pay for salaries and
benefits of teaching staff.