Put Education First in Funding Formula : The Pool’s School Districts Deserve Full Restitution

What to do about the school districts that lost money in the collapse of Orange County’s investment fund has been central to the county’s recovery effort. The case for the fullest possible restitution is very strong.

The first reason lies with the county’s deepest sense of what it is all about.

A second has to do with the involuntary nature of the participation of the school districts, which funneled virtually all of their operating funds through the county treasury.

To cheat the schools of the ability to get back on their feet would be to shortchange the county’s present and future taxpayers and residents, an action that would have dire long-term consequences.

One of the things that makes Orange County special as a place to live and work is its commitment to education. To deny the schools would change the climate of decision making that has made Orange County attractive to businesses and to individuals who make choices about where to settle.

In building this county, prior residents made the commitment and passed the building blocks along to those who are now in leadership positions around the county.

The question of the five districts that took the unusual step of borrowing additional millions to invest in the funds certainly did involve a gamble beyond the basic requirement of participation. But it would be self-defeating to punish the county’s individual school systems for some lapses in judgment.

Two supervisors, Marian Bergeson and William G. Steiner, both former school board members, understand what is at stake.

As Steiner explains, “I really feel that for us to allow any school district to go bankrupt would be irresponsible. You have to do what you’ve got to do and set some priorities, and we’re doing that.”

Their proposal calls for covering losses to the schools by borrowing money and then paying some from damages expected to be won. The question of whether to pay for the losses as the supervisors suggest or whether to do it through new and perhaps temporary sources of revenue ought to be an open question. But restitution for the schools cannot be compromised.

Recently, Supervisor Roger R. Stanton said he changed his position by supporting a plan to bail out schools since they were required by state law to participate in the fund. Earlier, he maintained that all 187 school districts, cities and other public agencies in the pool should share pain equally.

One strong argument for coming around comes from within his own supervisorial district. In a letter published on Jan. 15 in the Times Orange County Edition, Audrey Yamagata-Noji, president of the Santa Ana Unified School District, argued that essential educational programs are at stake and that failure to take care of the schools could bring on litigation that distracts from the important business of teaching.

She asked whether it was fair to “cheat our children by making them share the pain.” It’s a good question.

Painful sacrifices will be needed. But the first step of affirming a commitment to the future of the schools, and to the education of Orange County’s first resource, its children, must be made.