John Moorlach Warns of Impending Doom for CA Schools

California State Sen. John Moorlach sees a storm brewing for California’s public schools.

The Orange County lawmaker — who serves on the Senate Budget & Fiscal Review Committee and its education subcommittee, and is often credited with predicting Orange County’s 1994 bankruptcy — sounded the alarm in a report last month analyzing financial statements from the state’s 944 K-12 school districts.

More than 85 percent of the districts reported deficits on their balance sheets, which he says indicates a coming “tipping point into insolvency and receivership.”

“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,” according to a press release.

Here are some key findings provided by Moorlach’s office:

• 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.

Read the full report here