Scott Siegel: Gray helping lift cap on school reserves

As the legislature was finalizing the state budget in June 2014, they included a last-minute addition that would, when certain circumstances are met, cap most school district reserves at 6 percent. While the legislation also included more transparency around reserve levels, which is not a bad idea, the cap amounted to roughly three weeks of operating expenses – including payroll. This was profoundly poor policy. Having managed a school district budget for well over a decade, I can assure everyone that such low reserves lead districts quickly into insolvency.

At the time, Assemblyman Adam Gray reached out to assure me he would work to either repeal or fix this flawed legislation. I want to thank the assemblyman for being a man of his word and urge all of his constituents to support him in his efforts as a co-author of SB 799 – which would increase the reserve cap to 17 percent. That, in my professional opinion, should be workable for districts.

Such allowable reserves equate to two months of expenses, an amount in the lower end of the savings range recommended for individuals. Assemblyman Gray set aside partisan politics and helped find solutions beneficial to residents and entities in his district.

This story was originally published August 31, 2015 at 5:35 PM with the headline "Scott Siegel: Gray helping lift cap on school reserves."