Record Number of School Districts in California Face Bankruptcy

May 31, 2012

By: John Clark

A record number of school districts in California will be unable to pay their bills during the next school, which has raised concerns that several schools will be forced to forced to file for bankruptcy, according to a report from the Los Angeles Times.

The Inglewood Unified School District, located in Los Angeles, and 11 other districts, most of which are located in the northern part of the state, will not be able to meet their debt obligations during either this school year or the next, sources say.

Each of these 12 troubled districts has been decimated by steep budget cuts in California that were made necessary by the state’s dire economic woes created by the recent recession.

As California has cut public funding for broad range of educational services, the troubles in the state’s university system have received most of the attention, but smaller fish like local school districts may be suffering the most from the state’s economic troubles.

In addition to the 12 school districts that face imminent financial collapse, 176 addition districts are on the precipice of being unable to pay their bills, according to Tom Torkalson, the Superintendent of Public Instruction for California.

In a statement released this week, Torkalson said, “this is the kind of record no one wants to set. The deep cuts this budget has forced – and the uncertainties about what lies ahead – are taking an unprecedented and unacceptable toll on our schools.”

Indeed, the toll on the state’s schools is striking, as the 12 districts that may have to use bankruptcy’s automatic stay to stave off creditors serve more than 2.5 million children in California.

And many observers fear that the budget crisis could become more severe if an initiative passed by Governor Jerry Brown to raise taxes for public schools fails to pass during the election season in November.

In response to the budget cuts, which have amounted to 20 percent of previous funding for many districts, schools have begun taking drastic measures to increase funding.

Schools in Inglewood, for example, are holding “enrollment fairs” in a last-ditch effort to attract more state dollars into the school district, but such efforts may provide only short-term relief.

The state needs widespread reforms to have any chance at securing a long-term solution to its budget crisis.