Governor vetoes school assistance bill

San Bruno schools will not be able to loan themselves $1.4 million to cover contributions to retiree benefits after Gov. Arnold Schwarzenegger vetoed a bill to allow that late Tuesday night.

State law restricts how a district can use the proceeds from the sale of property to capital improvement projects. State Sen. Leland Yee, D-San Francisco/San Mateo, proposed Senate Bill 1447, which would have allowed the district to borrow up to $1.4 million of the money only for the current school year. Schwarzenegger vetoed the bill citing problems with the district continuing to be eligible for facility bonds under the measure.

"However, I am willing to sign a bill that provides some budgetary relief through the sale of excess property, as long as it excludes the district from applying for additional bond funds, and other conditions are met, as specified in prior bills I have signed,” Schwarzenegger wrote in his veto decision.

The district is currently unable to access money generated from the sale of Carl Sandburg Elementary. The school was closed in 1978 and sold in 2005 for $30.5 million.

"Considering the governor’s cuts to schools, I am quite dismayed by his veto of [Senate Bill] 1447,” Yee wrote in a prepared statement. "[Senate Bill] 1447 was a creative and responsible way to help save vital school programs and services. I plan to continue working with the school district to find other means of staying fiscally viable and I will introduce new legislation next session if necessary.”

The money represented five to six years worth of retiree payments which the district can repay over 10 years. If the measure had been passed, $250,000 usually coming from the general fund would stay put and the district would continue to benefit from the interest.

Since its introduction in February, the bill moved through committees and finally the Assembly and Senate floors without a single no vote. The bill went to the governor’s desk earlier this month where it has sat since Schwarzenegger declined to sign any law before a budget was in place — a situation that changed last week.

The bill has been altered while moving through the legislative ranks. Originally it had little restraints on how the money could be used. Now, the money can be used to fund one-time only expenses such as the district’s contribution to retiree benefits.

In addition, the district petitioned to the state allocation board to gain greater access to the revenue from the school sale site. The petition will be heard late next month. It does come with certain stipulations, such as the district forgoes access to certain state funds.

Legislation is just one way the district is planning for potential budget problems. District leaders are also working out language for a parcel tax poised to go before voters in March.

Heather Murtagh can be reached by e-mail: heather@smdailyjournal.com or by phone: (650) 344-5200 ext. 105.