On Friday school districts around the state cheered for West Contra Costa Unified, which finally paid off its debt to the state of California four years early. Charles Ramsey, the President of the WCCUSD Board, wrote:
It has been a long journey back to fiscal solvency and local control. Our community and school district have learned a great deal from this dreadful experience. . . [N]ever allow your district to go into state takeover. It is worse than you can imagine. Some will say that it is fine for the state to come in . . . As Nancy Reagan stated “Just say no”.
Mr. Ramsey is right — state takeover has been a horrible deal for the students of Richmond, El Cerrito and other communities. Their school district has paid the state $19 million in interest, on top of the $29 million that the state initially spent 21 years ago to bail the district out (the current board was not involved in the 1990 bankruptcy). Teachers took pay cuts, school were closed, and programs were cut to pay the debt.
Districts that do not maintain required reserves ($17 million in SFUSD’s case for 2012-13) or positive cash flow three years out are risking state takeover. And state takeover doesn’t just mean a loan that takes decades to pay off. It also means a state administrator, who has the power to set aside labor contracts, close schools, fire staff or take any other action to bring a district back into solvency — that is their only job, and they don’t have to listen to parents, students or teachers in making their decisions. Trustees from other districts that have been through state takeover (Oakland USD is one) are in complete agreement with Mr. Ramsey — don’t go there.