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State Investigates County Plan to Raid School Fund

Orange County officials want to divert $73.5 million earmarked for education, saying the state will reimburse school districts. But experts aren't sure the maneuver is legal.

The state is looking into whether it’s legal for Orange County officials to divert money earmarked for schools and use it to solve their own budget woes.

County Board of Supervisors Chairman Bill Campbell announced the plan two weeks ago, saying officials would to county coffers to help fill a $49.5-million budget hole and stave off county layoffs.

Campbell said he was confident the state would reimburse the schools. But county Superintendent Bill Habermehl, who wasn't told of the plan ahead of time, said he doubts the state has the financial wherewithal to make Orange County’s schools whole.

And state officials now question whether the county has the right to even try to make a play for the funds.

"We're determining what the range of options are right now," said H.D. Palmer, deputy director of external affairs for the state Department of Finance. "Legal options may be one of them."

Currently, the county puts the property tax money in question into an account called the “education revenue augmentation fund.” From there, it is supposed to be distributed to school districts throughout Orange County, according to two finance officials in the county Department of Education, who noted that the fund was already expected to be $30-$40 million short this year.

This means the total potential shortfall to local schools . 

Campbell said county lawyers he consulted are confident Prop. 98 requires the state to reimburse the schools. Passed by state voters in 1988, the initiative guarantees school funding will comprise about 39 percent of the state budget.

Palmer said Orange County officials haven't shared their legal findings with the state, but he suspects they may be "rewriting or misinterpreting" the law.

"It does seem to us it may run afoul of the rules of the road," Palmer said. State officials are looking into potential responses but won't make a move until the county does.

Meanwhile, Habermehl and other school officials are closely watching revenue reports from Sacramento. Lawmakers added  if state tax revenues didn’t keep up with the rosy projections on which the state budget was based. So far this year, the state is $3.7 billion behind, reports the Sacramento Bee.

Joker Joe December 01, 2011 at 04:34 PM
Maybe parents should consider if they can afford children before having them. It seems like the parents are also on the public dole trying to get MORE for the schools. 40 yrs. ago I wrote to an editor explaining that parents are ALWAYS putting the responsibility of funding their children to others. I did not have the pleasure of conceiving them. I will pay for their incarceration. I will pay for their welfare. I will pay for the crimes they commit. But how about parents paying for their schooling? I NEVER asked for my children's schooling to be funded. That said Fountain Valley and Huntington Beach schools were terrible. I and my wife volunteered at the schools but still it slipped by us how poorly he wrote and how badly he handles math. This was 40 yrs. ago. All these kids need is a decent teacher, books and pen and paper. The millions wasted is pathetic.
Blake Driver December 01, 2011 at 04:53 PM
School aren't underfunded if anything they receive to much money. The problem is how the money is being allocated at schools. Jackoo the kids don't need "decent teacher" we have plenty of those. We teachers that will inspire and challenge students to purse excellence. Went to public school my whole life and have only had a handful of teachers that really inspired and challenged me.
Joker Joe December 01, 2011 at 05:27 PM
Blake I also went to public school and there was no inspiration from teachers. Much worse now. Lots of sex with the kids. Penn State & Syracuse lately. Then the grammar and high school teachers. One teacher even married the child after she got out of jail. Your right about the money. To much union influence.
Joker Joe December 01, 2011 at 07:29 PM
teacher having sex with students in Ca. Google the above. I could not believe the amount of "DECENT TEACHERS". Blake. You gotta be a teacher!! just sayin'
Eric Richardson December 01, 2011 at 11:20 PM
Melissa, very true that we need to be more intelligent about investing in our public education. One of the biggest problems is that the unions protect incompetent and apathetic teachers, so they can't be fired. I believe most teachers are very caring and dedicated people who love what they do and care about educating children. But there are many who are there because they couldn't do whatever it is they really wanted to do. They don't care about educating children. They should go.

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