As California Defers Payments, Some School Districts Take Out Loans To Cover Expenses

The Sacramento Bee (4/8, Lambert) reports that California "sends fewer dollars to...schools these days -- a total of $18 billion less over the last two years." Moreover, "much of the money districts do receive is coming late -- sometimes as much as five months after the payments originally were scheduled." In a letter dated March 30, the state Department of Finance said that "districts collectively should expect three one-time deferrals of $2.5 billion next school year." Only school districts that are facing bankruptcy may choose to opt-out of the deferred payments. Some school districts throughout the state are having to take out loans to cover expenses, though the Bee points out that "so far, most local districts have managed to avoid taking out loans" by "juggling finances through layoffs and program cuts, digging into reserves and borrowing from funds dedicated for other expenses, such as pensions and facilities."