MOORLACH UPDATE — San Bernardino County School Districts — November 5, 2018

The Sun provides my editorial submission on the public school districts in San Bernardino County.

For Orange County, see MOORLACH UPDATE — Get Mad, Get Motivated — October 19, 2018.

For Riverside County, see MOORLACH UPDATE — Riverside County School Districts — October 31, 2018.

For a complete overview, see MOORLACH UPDATE — Public Schools Financial Crisis — November 3, 2018.

Sacramento will have to be focusing more on how it funds the education of California’s students. As one of three members of the Senate Budget and Fiscal Review Subcommittee One on Education, you can be sure I’ll be encouraging my two Democratic colleagues that action is required and the sooner the better.


All San Bernardino County

school districts but three bleed

red ink


Of San Bernardino County’s 33 public school districts, only three boast a positive balance sheet. Unfortunately, the other school districts have balance sheets that bleed red ink.

The scoring comes as part of my new report, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities.” It reviews the financial soundness of all 944 California public school districts. I performed a similar review of California’s 482 cities back in March.

The rankings derive from each district’s latest Comprehensive Annual Financial Report, which you can find on their respective websites. In each CAFR, look for the “Basic Financial Statements,” starting with the page titled “Statement of Net Position.” Look at the top row for “Government Activities.” Then look down the column to where it says, first “Net Position,” then “Unrestricted.” That’s the number you want: the Unrestricted Net Position, or UNP.

The number will either be positive or, with parentheses around it, negative.

I also divide the UNP by the district’s population to get a per-capita UNP. If negative, that’s the amount each person in the district is in hock for, whether or not your children attend school. Citizens should be concerned about the trajectory of these negative balances, which are commonly attributed to unfunded pension liabilities. As school board members are auditioning for their jobs, they need to be held accountable for dealing with these liabilities.

If the negative number runs too high too long, it will mean cuts in teachers, equipment, band and sports, and ultimately calls for tax increases. In the worst cases, takeover by the state, even bankruptcy, is not out of the question.

Trona Joint Unified boasts a positive UNP per capita of $6,354, the top for the county and the third best of the state’s 944 districts. Bravo! That’s quite an accomplishment. It’s followed by Baker Valley Unified, at $2,223, the 17th best in the state. Then by Cucamonga Elementary, at $1,842, the state’s 23rd best.

Scoring three districts in positive territory, San Bernardino surpasses neighboring Orange and Riverside counties, each of which had just one with a positive balance sheet.

That’s the end of the good news. The remaining 30 districts dip into the red. Fourth best in the county is Chaffey Joint Union High, 323rd best in the state at ($462); next is Alta Loma Elementary, ranked 325th at ($465). At least they were in the top third of California districts.

Only 10 districts in San Bernardino County were in the top half of the state’s 944 districts.

The two lowest-ranking districts were Mt. Baldy Joint Elementary, in 888th place at ($1,688); and Fontana Unified, in 882nd place at ($1,662).

While I’m not predicting bankruptcy for these districts, I’m sure everyone in the county is aware of the risks from the city of San Bernardino’s 2012 Chapter 9 filing. For comparison, the city’s CAFR for 2011, the year before it entered a federal courtroom, showed a UNP of ($260.9 million). That put the per capita UNP at ($1,232). But, this was before the unfunded liability for the employees’ defined-benefit pension plan had to be included in the balance sheet.

As with the city, the problem with these schools districts being in the red largely rests with excessive pension costs busting budgets.

Among the largest districts by population, Chaffey Joint Union High in Ontario ranked 323rd, with a ($462) UNP per capita, Fontana Unified placed 882nd at ($1,682) and Silver Valley Unified placed 880th at ($1,642).

In terms of the raw totals of how much these districts are underwater, the numbers are: ($192 million) for Chaffey, ($405 million) for San Bernardino City Unified and ($309 million) for Fontana. That’s nearly a billion dollars for just three districts.

Here are the per capita UNPs for all of San Bernardino County’s school districts, best to worst:

  1. Trona Joint Unified               $6,354
  2. Baker Valley Unified             $2,223
  3. Cucamonga Elementary       $1,842
  4. Chaffey Joint Union High      ($462)
  5. Alta Loma Elem                      ($465)
  6. Barstow Unified                      ($559)
  7. Lucerne Valley Unified          ($632)
  8. Etiwanda Elementary            ($644)
  9. Victor Valley Union High       ($649)
  10. Helendale Elementary           ($696)
  11. Ontario-Montclair                   ($726)
  12. Morongo Unified                     ($774)
  13. Snowline Joint Unified           ($746)
  14. Apple Valley Unified               ($787)
  15. Rim of the World Uni              ($832)
  16. Mountain View Elem              ($876)
  17. Victor Elem                               ($889)
  18. Yucaipa-Calimesa Joint          ($899)
  19. Chino Valley Unified               ($952)
  20. Hesperia Unified                     ($965)
  21. Adelanto Elementary             ($986)
  22. Bear Valley Unified                 ($987)
  23. Oro Grande Elementary     ($1,037)
  24. Redlands Unified                  ($1,097)
  25. Rialto Unified                        ($1,131)
  26. Needles Unified                    ($1,155)
  27. Upland Unified                     ($1,265)
  28. Colton Joint Unified             ($1,417)
  29. Central Elementary             ($1,473)
  30. San Bernardino City Uni    ($1,531)
  31. Silver Valley Unified           ($1,642)
  32. Fontana Unified                   ($1,662)
  33. Mt. Baldy Joint Elem           ($1,688)

The tallies are part of my effort to track the per capita UNPs of California’s various government balance sheets. In addition to the city balance sheets mentioned earlier, I have tracked counties, community colleges, California State University and the University of California as well as all 50 U.S. states.

You can follow all these analyses on my legislative website. The reports will be regularly updated.

Next year is going to be especially revealing – and distressing – as the Governmental Accounting Standards Board for the first time will require balance sheets to include unfunded retiree medical liabilities, which will show even more city and school districts in critical condition.

And when the next economic recession hits, for even those modestly distressed, it’s going to be one big financial train wreck.

Let’s hope our elected school board members and their administrative staff get in front of this serious cash management squeeze on their horizon. It’s time to be proactive, as taxpayers are not very forgiving with those who are reactive. Especially with supposed leaders who only have one solution: raise taxes.

John M.W. Moorlach, R-Costa Mesa, represents the 37th District in the California Senate


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MOORLACH UPDATE — Selected to Serve — May 28, 2018

Allow me to wish you a solemn Memorial Day as we show respect for those who died in active military service for our nation. Many volunteered to serve, but many were also selected to serve through the military draft.

Speaking of serving, many ask, “How do I put up with it in Sacramento?” I tell them that it is not easy to be in the super-minority. But, there are sources of encouragement. One is the potential of this year’s election efforts. The other is the Howard Jarvis Taxpayers Association.

So, after this year’s election skirmishes, what may the State Senate look like in December of this year? The odd numbered Senate Districts are not up this cycle, so expect to see Senators Gaines (SD 1), myself (SD 37), Morrell (SD 23), and Wilk (SD 21) there.

However, Sen. Gaines is running for the State Board of Equalization. If he is successful, we will need to replace him with a Republican. But, we only start with a definite three and possible four, if Sen. Gaines is not successful in his quest.

Let’s hope that Senators Bates (SD 36), Nguyen (SD 34), Nielsen (SD 4), Stone (SD 28), and Vidak (SD 14) are re-elected. That brings us to eight or nine.

We need to replace Sen. Anderson (SD 38), Berryhill (SD 8), Cannella (SD 12), and Fuller (SD 16), with Republicans, so good candidates are being supported by the Republican Caucus. This should bring us to twelve or thirteen.

If Sen. Gaines is successful and he is replaced by a Republican in a special election, we are at a definite thirteen.

If we can get Rita Topalian to fill Democratic Senator Tony Mendoza’s vacant seat (SD 32), then we are at the magic fourteen level. This means the Democrats will not have a two-thirds stronghold in the State Senate.

If the recall of Senator Newman (SD 29) is successful and we replace him with one of the Republican candidates, we’re at fifteen!

If Senator Galgiani (SD 5), who is running for another District seat on the State Board of Equalization, is successful, then we have a chance to replace her with a Republican. That gets the Republican Senate Caucus up to sixteen!

I would still be in the Minority Party, but not the Super-Minority, which provides for a more sporting chance to stop crazy bills and an opportunity for Republican bills to move forward by persuading two or more Democrats to vote with us. There is reason to feel some optimism and hope.

In the meantime, there are organizations in the Capital that provide moral support to me and my Republican colleagues. One of them is the Howard Jarvis Taxpayers Association (HJTA). This organization is worthy of your financial support, as it is one of the foremost nonprofits working on behalf of the taxpayers.

HJTA President Jon Coupal is a strong voice. He was kind to me in one of his weekly Sunday columns earlier this year (see MOORLACH UPDATE — Attaboy — January 22, 2018).

His most current column focuses on the lack of transparency in Sacramento when it comes to your tax dollars. For background, see MOORLACH UPDATE — Worked So Hard — May 19, 2018, MOORLACH UPDATE — The Joys of Presenting Bills — April 24, 2018 and MOORLACH UPDATE — SB 1297 – COO — April 19, 2018.

Jon Coupal’s piece was published in the LA Daily News, The Sun, and the OC Register and is provided below.

At the end of last week, I was selected to serve again as one of the two Republican Senators on the annual Budget Conference Committee. I will be serving alongside Sen. Jim Nielsen (also see MOORLACH UPDATE — Budget Conference Committee — June 8, 2017). The Budget Conference Committee reconciles the Assembly and Senate Budget recommendations for approval by both Chambers and the Governor. This is a significant honor, but also a major time commitment. Consequently, I will be extremely busy between now and June 15th.


Progressives love transparency except when they don’t


We’ve all heard of “situational ethics.” This column is about “situational transparency,” a phenomenon among progressives who love transparency in matters of public policy, except when they hate it.

Let’s review the areas in which progressives support transparency: the salaries of CEOs, the race and gender of employees, the details of business supply chains” and, of course, extensive disclosures about campaign finance.

But in other matters, particularly relating to their own interests, the same people are flatly opposed to transparency. For example, progressives claim to desire disclosure of who pays for political advertising, and they backed legislation such as Assembly Bill 249, a burdensome mandate to add confusing content to political ads. It was so burdensome, in fact, that an exception was made for ads paid for by labor unions, major backers of progressive politicians.

Progressives also campaigned hard against Proposition 54, the California Legislative Transparency Act, which voters approved despite liberals’ complaints. Prop. 54 requires that bills must be posted online in their final form for at least three days before lawmakers can cast a final vote on them. Proposition 54, which the voters approved in 2016, also requires the Legislature to make video recordings of all public hearings, and it allows any member of the public to record a legislative hearing.

Another example of how those in power resist having the public see what they are doing involves public employee compensation. For years, government agencies and departments have resisted disclosing how much their managers and employees are paid in both salaries and benefits. The Howard Jarvis Taxpayers Association had to file numerous lawsuits — or threaten lawsuits — to get local governments to disgorge the data. After prevailing in all those actions, compensation data is now available for public inspections — a healthy development in countering government entities that constantly plead poverty and demand higher taxes.

Perhaps the most glaring example of progressive hypocrisy when it comes to transparency is revealed by the defeat of Senate Bill 1074, authored by state Sen. John Moorlach, R-Costa Mesa, which would have provided California’s millions of motorists with valuable information about the price of gasoline. Titled “Motor Vehicle Fuel: Disclosure of Government-Imposed Costs,” SB1074 would have required gas stations to post near each pump a breakdown of all the different costs that go into the price per gallon of fuel, such as federal, state and local taxes and costs associated with environmental rules and regulations, including California’s hidden tax, the permit fees that fuel producers have to pay under the state’s infamous cap-and-trade law.

As you might expect, the progressives who control the state Legislature refused to provide the public with the true cost of government when it comes to driving our cars. The same folks who rail against the oil companies and who are quick to allege deep conspiracies about corporate profits have no interest in informing the public about government-imposed costs that dwarf the oil companies’ profit margin on a gallon of gas.

We can also expect them to oppose the government transparency that would be required by an initiative that recently met the signature requirement to qualify for the November ballot.

The Tax Fairness, Transparency and Accountability Act of 2018 would require that any law creating a new, increased or extended tax must contain “a specific and legally binding and enforceable limitation on how the revenue from the tax can be spent.”

Even if the tax revenue will be spent for “unrestricted general revenue purposes,” the law must say so.

California politicians often complain about “ballot-box budgeting” and requirements for voter approval before taxes can be raised. But progressives have earned a reputation for hiding the cost of their policies, and voters can’t be blamed for playing an aggressive defense.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District. If you no longer wish to subscribe, just let me know by responding with a request to do so.

Also follow me on Facebook & Twitter @SenatorMoorlach