Community Commentary: State recaptures most of $4.3 million awarded to schools

Published in the June 26 issue of Morgan Hill Life

By Donald C. Moody and Kirsten Perez

As a result of a recent agreement between the county of Santa Clara and the city of Morgan Hill, the Morgan Hill Unified School District was awarded $4.3 million. The $4.3 million stems from the fact that for more than a decade, increases to property taxes were allowed to be diverted to the Redevelopment Agency to make improvements in the community instead of being passed through to school districts, libraries and other local agencies. While $4.3 million seems like a nice pot of unexpected revenue, in reality it is much less. Morgan Hill Unified will receive only $929,000 of the $4.3 million.

A portion (more than half) of the $4.3 million will go back to the state as a “fair share reduction” to equalize per student funding between all districts in California. Another portion ($762,000) will go to county-wide charter schools approved by the Santa Clara County Board of Education which serves Morgan Hill resident students.

This “fair share reduction” and redirection of funds to county charter schools leaves Morgan Hill School District with just 22 percent of the amount the district was awarded. Although the district is happy to receive the additional funding, we are disappointed that once again the state provides funding with one hand and takes it away with the other.

To give an even broader picture of state funding for schools, our school district currently receives only 78 cents of every dollar that is allocated for education.The state calls this the “deficit factor.” The deficit factor has increased every year since 2008. It is one of the ways the state deals with its own fiscal crisis.

Another way the state deals with difficult financial times is to defer payments to school districts. While the district must pay staff and vendors for services rendered on a monthly basis, the state commits to a certain amount of money at the beginning of a school year, but defers payments for six months or more. In order to maintain a positive cash flow, MHUSD must take out a bridge loan every year to cover this deferral practice.

With this latest development of RDA funds earmarked for schools being recaptured by the state, the district sees once again that it cannot count on the state to provide stable funding for schools, nor can it count on revenue from local property taxes.
While California’s per capita income level ranks 15th in the nation, California’s public schools rank 48th in per pupil funding.
Donald C. Moody is president of the Morgan Hill Unified School District board of trustees. Kirsten Perez is the Assistant Superintendent Business Services.