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N.Y., California Governors Call for Deep Cuts in School Spending

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Faced with growing revenue shortfalls and bleak economic forecasts, the governors of the nation's two most populous states are calling for deep cuts in spending for education and other services.

In moves that analysts said could be harbingers of similar actions by many other states, Mario M. Cuomo of New York and George Deukmejian of California this month each unveiled sweeping plans to trim about $1 billion from their state budgets.

Governor Cuomo's strategy for eliminating a $900-million state deficit without a tax increase would require a $200-million, or 2.5 percent, reduction in school aid for the current school year and a 10 percent reduction in the state workforce.

Governor Deukmejian, meanwhile, renewed his proposal that legislators suspend Proposition 98, which sets minimum funding levels for public education. Such a move, he argued, would enable him to rebudget Propostion 98 funds that he impounded last summer and thus cut education spending by $526 million, in order to cope with a $408-million drop in state-revenue projections for the current fiscal year.

In the same week that Mr. Cuomo and Mr. Deukmejian announced their austerity plans, the Michigan legislature's bipartisan Senate Fiscal Agency issued a report projecting the state would suffer a revenue shortfall of about $980 million during the 1990-91 fiscal year.

"A lot more announcements of significant budget shortfalls" will be made within the next month, as many of the 30 or more states that are confronting fiscal difficulty release bad news they had been withholding until after the elections, warned Gerald H. Miller, executive director of the National Association of State Budget Officers.

The proposal outlined by Governor Cuomo would cut about $1 billion out of the $8 billion the state had planned to spend by the end of the fiscal year in March. The total budget for the year is about $30 billion.

The plan, much of which is subject to approval by the legislature, calls for mandatory five-day furloughs for all state employees and a reduction in the state workforce by 18,000 positions over the next 17 months through layoffs, early retirement, and attrition. The Governor has not specified how many jobs would be cut in the state education department.

The proposed $200-million reduction in state aid would be distributed among school districts according to the wealth-based portion of the existing state-aid formula. Reductions in per-pupil aid would range from $20 in the poorest districts to $400 in the wealthiest, with New York City projected to lose $78 per student.

Districts will have considerable flexibility in terms of where they make their budget cuts, a spokesman for the Governor noted. The spokesman also argued that the impact of the cuts will be mitigated by previous aid increases, which have exceeded inflation in recent years.

But Joseph A. Fernandez, chancellor of the New York City schools, warned that the proposed aid cuts could force him to lay off thousands of teachers.

The financially strapped district is projected by state officials to undergo a $72-million cut from its $2.9-billion state-aid appropriation.

"Obviously these cuts, coming on top of the cuts the city has already asked us to take, are damaging," said Mr. Fernandez, who noted that he has asked for relief from some costly state mandates to soften the financial impact on his district.

The proposed state-aid cuts appeared to put Mayor David N. Dinkins and other New York City officials under increased pressure to abrogate a 5.5 percent pay increase they negotiated last month with the United Federation of Teachers.

Andrew Stein, president of the City Council, said the new state cuts affirmed his view that the 5.5 percent pay hike "will only exacerbate an already bad situation" by resulting in an increase in class sizes.

But Neill S. Rosenfeld, a spokesman for the 85,000-member u.f.t., asserted that the city is legally bound to honor the pay increase. The union plans to join in protests against the proposed education-funding cuts, he added, noting that they follow on the heels of a $185-million reduction in city funding for education this year.

Governor Deukmejian announced the austerity measures for the current fiscal year in the wake of the release of a report by a bipartisan legislative committee that indicated that cumulative fiscal 1990-91 revenues would be $408 million below projections. The report also warned that October was marked by a "broad-based, ongoing weakness across all of the state's major revenue categories."

As part of his plan to trim $1 billion from the $43-billion state budget, Mr. Deukmejian proposed saving $25 million by reducing all state operating budgets except higher education by 1 percent, and $75 million by recapturing property-tax revenues to school districts that are in excess of budgeted amounts.

When the legislature reconvenes early next month, the Republican Governor also said, he will ask it to suspend Proposition 98, which guarantees public precollegiate education and community colleges 40 percent of the state general fund.

Mr. Deukmejian made a similar request last summer, but was unable to muster the two-thirds majorities needed in both legislative chambers. He subsequently sequestered more than $460 million in state-aid funds, but State Controller Gray Davis, a Democrat, has continued sending the money to districts. Suspension of Proposition 98 would finalize the fund impoundment.

A spokesman for Superintendent of Public Instruction Bill Honig predicted that any effort to suspend Proposition 98 would encounter "a serious political fight."

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