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Districts get power, if not cash, in Gov’s budget

01.06.2012 | Thoughts on Public Education | Kathryn Baron

California schools could gain billions or once again face the threat of a midyear budget cut under the 2012-13 budget proposal released in Sacramento yesterday by Gov. Jerry Brown.

At a hastily called news conference, held after the budget was accidentally posted days ahead of schedule on his finance department’s website, the Governor presented a plan for closing the state’s $9.2 billion budget gap that’s contingent upon approval of his $7 billion tax initiative. And he presented the evil-twin plan in case the tax measure is defeated.

Brown said if voters support his plan to raise sales and income taxes in November “we will eliminate the budget deficit, finally, after years of kicking the can down the road.”

For K-12 schools and community colleges new tax revenues would bring an increase of $4.9 billion in 2012-13, for a total Proposition 98 funding level of $52.5 billion. That would boost per-pupil spending from $7,096 this year to $7,815 next year. But even if the tax plan wins, most of that money will be little more than a specter in classrooms. Brown’s proposal would use $2.1 billion to backfill this year’s deferral and another $2.1 billion to start paying off the $10 billion in deferrals already accrued.

What’s more, the plan still doesn’t provide for a cost of living increase of 3.1 percent, which would be added to a growing multi-billion IOU known as the maintenance factor.

Dan Troy, the Community College Vice Chancellor for Fiscal Policy, says he understands strategically why the governor wants to bring down the debt before funding new programs, but, at the same time, he says the colleges could really use the money after losing $102 million in last month’s midyear trigger cuts, raising fees by 77 percent in less than two years, and receiving no cost of living increase since 2007-08.

“Technically the $218 million does count,” said Troy, referring to the amount of money the state’s community colleges would gain under the budget plan. “We just can’t buy anything with it.”

Still, it’s better than more cuts, and that’s what will happen if voters don’t approve the governor’s tax plan, or one of the other initiatives to fund education that are currently competing for ballot space.

Two things would happen if the revenues don’t pass, said state Finance Director Ana Matosantos. First, it would trigger a $4.8 billion reduction in Prop 98 that would amount to the equivalent of three weeks of school. That doesn’t mean that the school year would be shortened by three weeks; it’s meant to illustrate how much money is at stake.

The other cut is more convoluted. It would shift or “rebench” the debt payments from the state’s K-14 general obligation bonds from the General Fund to Prop 98, giving schools and community colleges a brand new $2.4 billion expense. Ah, but it’s not all bad; Matosantos said that would preclude a suspension of Prop 98.

Consolidation consternation

Lost in much of the rollout yesterday was a sweeping change proposed to how schools are funded. The governor wants to move to a weighted-student formula, which you can read about today in John Fensterwald’s column.

Brown also wants to give local districts more decision-making power over how they spend their money, and he aims to do that by increasing flexibility for most remaining categorical programs (with the exception of federally-mandated programs, such as special education and foster care), even seemingly sacred cows like class size reduction.

“That means if they think they can save some money by adding a few kids to a class instead of something else then they can do that, that’s their choice,” said Brown. “I have confidence that the local democracy is at least as vigorous and as responsive as our statewide democracy.”

Some advocates and legislators are alarmed by the possible unintended consequences this could have on hard-won programs. Senator Joe Simitian’s (D-Palo Alto) legislation that just became law in 2010, which increases the kindergarten entrance age but provides funding for the younger children to attend transitional kindergarten, could be wiped out before it really gets going.

“The Administration’s budget proposal is a $700 million hit to K-12 education at the expense of 4-year-olds and their families,” said Simitian, referring to the three-year implementation costs for the program. “The notion that 250,000 parents and their 125,000 kids are no longer eligible to begin school in the fall is a non-starter.”

Another program that may be eliminated is Advancement Via Individual Determination, or AVID, which provides extra study skills and support to help prepare high school students who could be the first in their family to attend college.

Higher Ed remains flat

The budget plan for the University of California and California State University is essentially status quo, which doesn’t sit well with CSU Chancellor Charles Reed. In a statement on the Cal State website, Reed said the governor’s proposed $2 billion for CSU is the lowest state support for the system in 15 years, even though Cal State enrolls 95,000 more students today than it did back then.

“We cannot continue down this budget path and expect that we can offer the same number of courses to the same number of students and maintain quality,” said Reed, adding that “we are just about out of options, and if the state does not begin to reinvest in the CSU, we will need to take more drastic measures including cutting enrollment and programs, raising tuition, and reducing personnel.”

Gov. Brown made a point of saying that he thinks higher education has been hit too hard already and he’d like to find a way of getting them more money to avoid any further tuition increases. So far, his budget plan doesn’t contain any specifics on how to do that, but it would chop another $100 million each from UC and CSU if the tax plan fails.

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