State Sues Over School Money Grab

The state of California has sued Orange County for withholding property tax money it was going to give local schools.

Late last year, the county Board of Supervisors , basically telling them not to worry about it, the state would make them whole eventually.

For , the move  to . 

The county had been haggling with the state for years over property tax and vehicle license fees funds. In looking for a way to make up a $49.5-million budget hole and stave off layoffs scheduled for December, the county supervisors found their answer in the schools’ moneypot.

After , the state sued the county Thursday to stop what school officials call a “money grab” and what the state calls an “extraordinary step of flouting the law,” according to the lawsuit filed in Orange County Superior Court.

The lawsuit says the county violated both state law and the state Constitution in diverting money from the so-called “education revenue augmentation fund.” 

While the lawsuit acknowledges the state is obligated to “backfill” the owed moneys to K-12 school districts, no such obligation exists for community college districts, which are facing a $12-15 million shortfall because of the county maneuvering.

The state also argues that the state’s obligation to make the K-12 districts whole is designed to help schools when, in the normal ebb and flow of the economy, property taxes do not meet projections. The state should not be required to pay for the county’s “illegal manipulation” of its fiscal affairs.

“The county of Orange should not be rewarded for its refusal to follow the law,” the lawsuit states.

The lawsuit seeks an injunction stopping the county in its tracks.

The Orange County Department of Education is also contemplating its own lawsuit and has asked the affected school districts to join its efforts. At the last Board of Trustees meeting, the CUSD trustees voted to spend $5,000 to help out the county.

“If there’s litigation, it’s important for us to be able to respond quickly rather than to try to hire lawyers,” interim Deputy Superintendent of Business and Support Services Robyn Phillips said at the time.