County Wants $73.5 Million From Schools

Feeling blindsided by the county's attempt to divert $73.5 million in property taxes away from local schools and into county coffers, the Orange County superintendent of schools today fired off a terse letter to Board of Supervisors Chairman Bill Campbell.

“The students cannot afford the risk of losing this money,” wrote Superintendent Bill Habermehl. “Our organization is now looking at options, and as the elected county superintendent of schools, I am requesting that you take no action regarding these funds until all sides are clear on how this would affect each agency.”

The county has been haggling with the state for years over property tax and vehicle license fees funds. After a money grab by the state earlier this year, the county supervisors have been looking to make up a $49.5-million budget hole and stave off layoffs scheduled for December.

Campbell announced the plan to redirect $73.5 million in property taxes from schools back to the county Monday, catching Habermehl off-guard.

“I was shocked and disappointed that we were not involved in the discussion,” Habermehl told Patch.

Campbell has said that he is confident Prop. 98 will make the school districts whole. Passed by the voters in 1988, the initiative guarantees school funding will comprise about 39 percent of the state budget.

Habermehl does not share his optimism.

“It would be a devastating blow for Orange County schools,” he said. “There’s no guarantee that the money would be backfilled.... That’s a huge assumption.”

In response, Campbell said of Habermehl: "He's an expert, I'm an amateur. But we did hire expert attorneys who said the state is obligated under Prop. 98 to pay the schools.

Campbell vowed to work with education officials on the issue going forward.

Even if the state agrees to make up the missing $73.5 million to the schools, it will take some time to reach the schools, requiring districts to take out short-term loans to handle cash-flow issues.

has already borrowed $37.5 million this year, which it must pay back by May, said Ron Lebs, deputy superintendent for business services. The board has already given permission to borrow another $37.5 million before year’s end if needed.

Habermehl said he doesn’t know exactly how the $73.5-million hit would be shared among the county’s 28 K-12 school districts, but that the cuts would probably be based on district size, with the largest school districts taking the biggest hit. Capoistrano Unified is among the top three largest districts in the county.

“This is so early in the game, it would be difficult, bordering on the impossible, to explain what this might mean,” Lebs said. “Everybody’s in the analysis stage.”

Habermehl said the play to divert the funds would be ongoing, not just a one-time solution. He said he could support the effort only if there were a guarantee for full funding for Orange County schools.

“I’m just not sure that’s going to happen. It’s my job to protect the students,” he said.