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Deukmejian Plan for Reserve Fund Seen As Assault on Proposition 98

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Gov. George Deukmejian of California has set the stage for a battle with public educators in his state by proposing that $230 million of the new money that would be available to schools under a constitutional amendment passed last year be set aside in a reserve fund for unanticipated educational expenses.

The proposed reserve fund is included in the approximately $900 million in new money that the Governor proposed be spent on education in his state-of-the-state and budget messages last week.

Bill Honig, California's superintendent of public instruction, argues that the reserve fund is an attempt by the Governor to bypass the intent of voters who approved Proposition 98, according to a spokesman.

Proposition 98, which voters approved last November, sets a constitutional minimum funding level for education.

If the legislature approves the Governor's proposal for an education-reserve fund, said Bill Rukeyser, Mr. Honig's spokesman, the amount of money that schools actually receive will not provide sufficient resources for both inflation and projected enrollment growth.

The proposed reserve fund is intended to cover unanticipated enrollment growth, inflation, or revenue losses, and is based on the actual funding deficiency for education programs that occured three years ago, said Robert L. Harris, an education budget official in the Governor's office.

The Governor intends that any money remaining in the fund at the end of each fiscal year be distributed to schools, he said.

Due largely to differing revenue estimates, the Governor's office and the state department of education remain far apart in their estimates of how much new money Proposition 98 will provide for schools during the current year.

Governor Deukmejian said that the schools should expect to receive an additional $116 million this year, while the state education department projects that the increase will range between $200 million and $280 million.

In his state-of-the-state speech, Governor Deukmejian said Proposition 98 and other spending restrictions had forced him to request reductions of $485 million in state health and welfare services.

He proposed spending $110 million of the new money for schools to reduce class sizes in key subject areas and grades. California currently has one of the largest average class sizes among the 50 states.

Some $30 million would be allocated to encourage districts to develop year-round school programs under the Governor's proposal.

Drug education would also receive an additional $16 million in state aid if the Governor's proposed budget is approved.

The state department of education has not yet completed its budget request, Mr. Rukeyser said.

Parental Choice Proposals

Mr. Honig is also developing proposals that would expand parental choice among public schools in the state, his spokesman said.

The current working proposal is a six-pronged approach that would cost the state an estimated $21.5 million annually.

The proposals currently under discussion would:

Require all districts to allow students to transfer both between districts and between schools within a district, subject to racial and ethnic balance guidelines and available space. Districts would be protected from losing too many students in any one year, and would be required to develop fair policies for admitting transferring students.

Fund approximately 40 new specialized schools that emphasize a particular area of the curriculum at a cost to the state of $5 million annually.

Provide incentives for the creation of schools-within-schools and interdistrict enrollment opportunities. About 300 school districts would receive $50,000 each, for a total of $15 million.

Provide $75,000 planning grants to 20 districts to foster the creation of alternative schools similar to New York City's Central Park East middle school.

Require school districts with any of these programs to assume responsibility for informing parents about their options.

Require that districts set clear and fair admission standards for specialized and innovative programs.

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