State Senator John Moorlach released his latest fiscal report yesterday, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities” (to download the report click here). It follows his March 2018 report on the state’s 482 cities that found 2/3 of them in the red; of 58 counties, 55 suffered deficits and only three enjoyed positive balance sheets. His May 2018 report on the 50 U.S. states found only nine were financially healthy, with California ranked among the worst, in 42nd place.
Some key findings from the new education report:
- About two-thirds of California’s 944 public school districts run negative balance sheets. These statements show the most distressed districts could soon reach a tipping point into insolvency and receivership.
- Of the state’s large school districts, those in severe distress include Los Angeles Unified School District, with a negative $10.9 billion balance sheet; San Diego Unified at negative $1.5 billion; Fresno Unified at negative $849 million; and Santa Ana Unified at negative $485 million, the worst in Orange County.
- Of Orange County’s 27 public school districts, only one, Fountain Valley School District, is in positive financial territory.
- One bright spot is the 58 county boards of education. At least 51 of them have manageable per capita unrestricted net deficits of -$159 or less, with 14 in positive territory.
- Of the state’s 72 community college districts, only one enjoys a positive unrestricted net position (UNP).
- Cal State University’s balance sheet is negative $3.66 billion.
- The University of California’s balance sheet bleeds red ink all over the state, at negative $19.3 billion. Worse, that will double next year, to $38.6 billion, when retiree medical is included.
The Moorlach Report is a flashing caution light to almost every public education budget in California. Unless things can change quickly, taxpayers can expect new levies, and post-secondary students and parents should fear higher tuition.
State Senator John Moorlach of Costa Mesa represents the 37th district of California. He is a trained Certified Financial Planner and is the only trained CPA in the California Senate. He gained national attention 23 years ago when he was appointed Orange County Treasurer-Tax Collector and helped the county recover from its bankruptcy filing – at that time the largest municipal bankruptcy in U.S. history.