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California to withhold $2.9B from schools

August 24, 2010 12:00:00 AM PDT
Unless state officials come up with a budget fix, California schools are going to find themselves a little short next month. Gov. Arnold Schwarzenegger, the state's controller and treasurer decided on Monday to withhold $2.9 billion a month in payments to school districts so the state can pay its own bills.

Campuses and school administrators are not happy with this decision. Schools knew the delay was coming, but they just expected it in October - not September.

In response to the expedited delay, the Association of California School Administrators said the state is just shifting its money problems onto them. Administrators say they're concerned about meeting their own payroll.

The delay will mean that school districts throughout California will have to budget even more conservatively as they begin fall semester.

President Barak Obama signed the federal jobs bill last week, giving more than $1 billion to California, meaning the state can rehire teachers. However, in light of Sacramento delaying education payments, many districts are holding off on rehiring at least until the state budget is finalized.

In February, the legislature gave the governor, state controller and treasurer the authority to delay payments over a 3-month period to help manage the state's cash flow.

School district and county officials may now be forced to borrow money to continue providing services.


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