10 L.A. County Districts Overspend

California’s school districts are spending more money than they receive from the state, with 16 Southland districts edging toward financial collapse, according to an audit released Thursday.

The report by the state controller’s office concluded that 79 districts, including 10 in Los Angeles County, five in San Bernardino County and one in Orange County, were projected to have difficulty funding future obligations.

“We’re looking at a state takeover of some districts ... or continued deficit spending,” state Controller Steve Westly said. “No one wants to see that.”

As a whole, California’s 982 school districts spent $213 million more than they took in from the state in the fiscal year ending June 30, 2004, the audit found. The deficit was caused by 552 systems that overspent by about $682 million. Many of them often balanced their books by tapping one-time state funds and emergency reserves. The latter stopgap led to a dangerous decline in six districts’ reserves, and a third of the state’s school systems were chronic, multiyear offenders, auditors found.

The Huntington Beach City School District annually has been spending as much as $1 million more than it receives, primarily by tapping its reserves, Supt. Roberta DeLuca said.

This year, the system is trying to spend only what it takes in and is cutting back library hours, health aides and administrative positions, DeLuca said. But $14,000 in spending still needs to be cut to balance the budget.

“We all feel compelled to continue to provide a quality education for kids,” DeLuca said.

In the Chino Valley Unified School District, five years of overspending led to the system’s shaky finances, spokeswoman Julie Gobin said.

School leaders routinely relied on one-time state grant money and reserves to pay for ongoing programs, so when the state’s economy weakened and funding dried up, the district was left short, she said. To balance its books, the school board reduced the number of teachers and student counselors and raised kindergarten class sizes.

“We’re not out of danger,” Gobin said, “but we have turned the corner.”

In Los Angeles County, state auditors said school districts in Bellflower, Palmdale, Pasadena, Pomona and Torrance were among the 10 in poor financial health.

Los Angeles Unified officials said the audit reflected budget problems the district had a year ago that have since been resolved. The budget now is balanced based on the state revenue the district expects to receive, budget director Roger Rasmussen said.

“I agree with the controller that school districts are hard-pressed, and we do not have adequate funding to provide the quality of education we’re being asked to provide,” Rasmussen said. “In the case of L.A. Unified ... he’s correct in pointing out the problems we had in ’03 to ‘04, but I think we’re past that.”

Westly said the financial problems largely stemmed from the state’s failure to fully fund education, as well as declining enrollment and seismic-retrofitting costs in several districts. Educators and some politicians believe that Gov. Arnold Schwarzenegger owes schools $2 billion under Proposition 98, a voter-approved funding guarantee.

Westly and state schools Supt. Jack O’Connell used the audit report to attack this year’s state budget, which they said shorted schools. Schwarzenegger is expected to sign the budget next week. They also denounced Schwarzenegger’s ballot measure in November’s special election that would limit California spending growth and give the state more flexibility over education spending.

“This budget will lock us into the basement,” O’Connell said. “Our schools and our school districts are working very hard and should not be put on the brink of financial insolvency in order to educate our youth.”

The governor’s ballot initiative “is the most direct frontal attack on public education in the past 25 years, and will simply emasculate so many education programs,” O’Connell said.

Margita Thompson, Schwarzenegger’s spokeswoman, said this year’s budget called for $50 billion in state spending on education -- $3 billion more than last year -- and would boost spending to more than $10,000 per pupil.

“What we need to do is take the political vitriol out of the process and try and find a solution,” she said.

“It’s such an important issue that these districts are on the brink of failure. We really do need to figure out what we can do to help them.”