California public schools, community colleges and counties will get an early holiday gift from the state: Sacramento will pay about $1.9 billion that it owes them in December, a month earlier than promised.
Even better news is that in March the state will pay them on time nearly $1 billion that it was going to defer until April.
The adjustments are one of the first tangible benefits from Proposition 30, the governor's school funding tax that voters passed in November.
Neither is really a gift, of course. "It's something they owed us already," said Ann Jones, chief business officer of San Jose Unified School District.
The $1.57 billion that Sacramento will send to K-12 schools in December -- plus $150 million to community colleges and $142 million to counties, mostly for CalWORKs programs -- is money that should have been paid out last summer and fall. But the state deferred those payments until January. By paying in December, the state will be just a little bit less late with payments.
But given that the news out of Sacramento for the last few years has been mostly gloomy, school officials said the development is encouraging.
Still, for districts that plan ahead for the whole school year, Sacramento's rescheduling makes little difference.
"It's really a nonevent for us," said Rick Hausman, chief business officer of the Cupertino Union School District, which borrowed $10.5 million about a month ago. "We already hit
Such borrowing has become more common as the state deferred more and more payments it owed schools and local governments. To maintain their cash flow, districts join a pool to issue what are known as temporary revenue anticipation notes, similar to bonds.
Normally, the state sends most school districts monthly payments. But it has been deferring some of those payments by a month or more or sometimes paying moneys owed for one school year in the next school year instead. Even with the elimination of the March deferral, California still won't pay until next school year $10.4 billion it owes schools and colleges for this school year.
Proposition 30 set aside money to enable the state to pay schools on time. By 2015-16, said Department of Finance spokesman H.D. Palmer, the state plans to have ended year-to-year deferrals.
The speeded up schedule will help some districts with cash flows, but it does not alter the total sum that the state pays to school districts.
"Obviously, it's good news," said Hausman. "But as far as districts are concerned, it's not giving us relief on anything."
Contact Sharon Noguchi at 408-271-3775. Follow her at Twitter.com/noguchionk12.