Number of California School Districts Facing Financial Trouble up 38 Percent

Unless a solution is found, some educational institutions in the state may have to file bankruptcy or cut programs.

While many Californians have had to file bankruptcy, some public institutions may not be having a better time when it comes to their finances.

Recently, the California Department of Education announced that the number of school districts that will be unable to meet future financial obligations has increased by 38 percent. Superintendent Jack O'Connell said that if proposed budget cuts are enacted, the outlook could be even worse.

"Schools on this list are now forced to make terrible decisions to cut programs and services that students need or face bankruptcy," O'Connell said.

For example, the school district in Sacramento is facing a situation where past concessions made to the teacher's union will make it face bankruptcy. Unless educators are willing to renegotiate their benefits, the educational system in that area could face dire consequences.

The department noted that over the past two years, more than 20,000 teachers have been released by districts due to budget shortfalls. In that time, districts have seen state funding cut by $17 billion.