Assemblymember O’Donnell Bill Easing Restrictive School Spending Caps Advances

For immediate release:

(SACRAMENTO) – Assembly Bill 531, which grants school districts greater spending flexibility in the wake of a budget reserve cap enacted last year, passed the Assembly Appropriations Committee on a bi-partisan vote of 17 to 0. The legislation, authored by Assemblymember Patrick O’Donnell (D – Long Beach), addresses local school districts’ concerns that the cap leaves them unable to save for maintenance projects, instructional materials and technology upgrades.

Current law requires California school districts to spend down their reserves and ending balances when the state makes even a minimal contribution to the Proposition 98 reserve. Critics of the policy argue such a requirement prevents districts from setting aside funds for large expenditures, which range from new school buses to roof replacements. Under O’Donnell’s proposal, money set aside in a committed reserve requires a vote of the governing board, providing the public an opportunity to see how much and where the money is being allocated.

“School districts need the financial freedom to set aside funds for future needs,” said Assemblymember O’Donnell, who chairs the Assembly Education Committee. “Clarifying that resources in a committed reserve are exempt from the cap unties the hands of local school boards and maintains fiscal responsibility.”

This bill now moves to the Assembly floor.

Assemblymember Patrick O’Donnell represents the 70th Assembly District which includes Long Beach, Signal Hill, San Pedro and Catalina Island.