By Ken Epstein
The financial austerity arm overseeing public education in California, the Fiscal Crisis Management and Assistance Team (FCMAT), has performed a behind-the-scenes role determining budgets, repeated cutbacks, layoffs, and the closures of 21 schools since they moved into Oakland along with the state receiver in 2003.
One district, West Contra Costa Unified, recently defied pressure from a FCMAT spokesman to lay off school staff, voting against the layoff recommendation proposed by the district administration.
It is now becoming clear to many local education advocates that under FCMAT, the state’s enforcer, or the whip hand of education austerity, K-12 school districts and community colleges statewide are being threatened with cuts, layoffs, and the possibility of loss of local control, even while the state is awash in an almost $50 billion surplus.
Every year, the California Legislature appropriates funding for FCMAT’s operation, providing most of the nonprofit agency’s financial support. Over the years, FCMAT’s scope has expanded, but it remains an extra-governmental agency, not subject to typical governmental oversight. Formed by the state in 1991, FCMAT’s authority has evolved as new state laws were passed.
Oakland Unified is not the only public school system labeled by FCMAT to be a “lack of going concern,” which FCMAT defines as a “message that a district is in jeopardy of not being able to continue on its own.”
At present, FCMAT says that there are 11 school districts in California “that have been designated as a ‘lack of going concern’ in 2021 for a variety of budget and non-budget concerns.”
These districts are Bellflower USD, Curtis Creek ESD, East San Gabriel Valley ROP, Loleta Union SD, Montebello USD, Oakland USD, Sacramento City USD, San Bruno Park USD, San Francisco COE, San Francisco USD and Sonora ESD, according to a report published Feb. 2 by FCMAT to the State Senate Budget and Fiscal Review Subcommittee.
Looking at “solvency trends,” FCMAT’s report cites a number of financial difficulties, which many see as connected to the pandemic crisis or ongoing insufficient state funding. FCMAT says the most common reason for less-than-satisfactory certifications of fiscal health “is declining enrollment.”
Other negative conditions include:
Decreased attendance rates
Expiring one-time funds.
Inflationary cost increases.
Increasing staff pension contribution rates
However, the report admits that Gov. Gavin Newsom’s Jan. 10 budget proposal could eliminate the “lack of going concern designation” for 50% of the districts on the list.
In addition, five Community College systems are on FCMAT’s “Distress or Watch List.”
Districts considered in distress are Gavilan in San Benito, Napa Valley in Napa and Peralta in Alameda. City College of San Francisco is on the watch list, and Compton in Los Angeles is categorized as in a borderline state of “Transition Planning.”
Although Richmond schools were not on FCMAT’s list, the West Contra Costa Unified School District (WCCUSD) is experiencing FCMAT’s heavy hand.
FCMAT CEO Michael Fine showed up at the school board meeting March 9 to support the administration’s proposal to lay off teachers and other school staff this year. Fine told the Board that the district has a choice to accept the cuts, or the Contra Costa County Superintendent of Schools will first declare a “Lack of Going Concern” and appoint an “advisor” to review the district’s budget and suggest changes.
If the board continues to refuse to make cuts, an overseer would be appointed with the right to veto WCCUSD financial decisions. If the board still ignores the ‘recommendations,’ the state could take over and give the WCCUSD a loan.
“A state loan is disastrous — it’s not good for the community, and it’s not good for the school district,” Fine told the Board, explaining that along with the loan, the superintendent would be dismissed, and the Board would lose its ability to govern. A state-imposed administrator would act as both the Board and superintendent.
Despite those threats, the Board voted 3-2 not to issue the layoffs, responding to pressure from employee unions. View the WCCUSD board meeting at www.youtube.com/watch?v=0kNZpHPM3yE
WCCUSD has a long history of dealing with FCMAT and state intervention. Formerly known as Richmond Unified, the district was under state control from April 1990 to June 2012.
According to officials, the takeover was the “salvation” of the district, keeping it from going bankrupt at that time. “But state control…was the polar opposite of salvation,” according to former school Board President Charles Ramsey, who served on the board during that time.
During the takeover, the district enforced pay cuts, mid-year elimination of enrichment courses and athletic programs, closed libraries and paid $2 million in annual loan payments at 6% interest. The community responded with a 75-mile protest march on Sacramento in 2004, with some participants holding a hunger strike.
“You have this shadow overlooking you,” Ramsey said in an interview in 2012 with the California School Board Association blog. “We barely survived, but we’re pleased that we’re now through it.”
Future articles will examine FCMAT’s impact on schools in Inglewood and San Francisco, as well as on San Francisco City College, which faces layoffs of 50 full-time faculty members.
