Published Online: February 24, 2009
Published in Print: March 4, 2009, as California Schools Girding for Cuts Under Fiscal Plan

California Schools Girding for Cuts Under Fiscal Plan

Education funding is expected to suffer billions of dollars in cuts this fiscal year and next under the budget compromise hammered out in California to close a projected $42 billion, two-year shortfall, sparking stiff criticism from teachers unions and other prominent education groups.

At the same time, however, the plan employs some creative budget maneuvers to defer the impact of certain cutbacks, and the federal stimulus package is expected to help offset many of the cuts.

Under the plan signed Feb. 20 by Republican Gov. Arnold Schwarzenegger, funding for public schools and community colleges in the current fiscal year under Proposition 98—a school funding guarantee approved by voters in 1998—would technically be cut by $7.4 billion, according to the California Department of Education.

Actual reductions for K-12 education, however, would be closer to $2 billion in the current year, a department official said. That’s largely because of steps such as the deferral of some spending until the new fiscal year begins July 1.

Proposition 98 funding would decline by about another $600 million for the fiscal year that begins July 1, said Carol Bingham, the director of the department’s fiscal policy division. In both years, districts would receive no cost-of-living increases for school employees.

As enacted last September, the current year’s K-12 budget under Proposition 98 was $51.6 billion. The cuts for the current fiscal year include almost $1 billion each in aid for categorical K-12 programs and general-purpose funds.

Fierce Objections

Many education groups were quick to attack the budget, a delicate political compromise with the Democratic-led state legislature worked out after crisis-pitch negotiations.

“Educators across the state are appalled that once again the legislature and governor have approved a horrible budget for public schools and important social services,” Marty Hittelman, the president of the California Federation of Teachers, an affiliate of the American Federation of Teachers, said in a Feb. 20 statement.

Rick Pratts, an associate executive director at the California School Boards Association, said the cuts come at a time when state and local funding for schools is a problem for districts.

“Districts are already at the point of cutting into those programs that provide direct services and instruction to kids,” he said.

But Gov. Schwarzenegger defended the package, which features a blend of temporary tax increases, major spending reductions, and substantial borrowing, as well as measures to help stimulate the economy.

“During a down economy and facing an historic budget deficit, we had to make some very difficult decisions, but I am very proud that California is back on the best path forward,” the governor said during a Feb. 20 signing ceremony.

The compromise got a tepid response from state Superintendent of Public Instruction Jack O’Connell.

“While this budget is not ideal to any extent, the uncertainty and instability for schools created by the lack of an agreement is over,” he said in a Feb. 19 statement.

He cautioned, however, “that part of the solution essentially transfers our state cash-flow problem to local schools and districts, and these cuts will impact our students.”

Mr. O’Connell did note that the plan hands districts new flexibility in spending much of their state aid, allowing them to transfer money between some 40 categorical programs. At the same time, Mr. O’Connell said he was pleased that certain key programs were spared in the final package, such as class-size reduction, child nutrition, and special education.

Creative Use, or Abuse?

Bruce Fuller, a professor of education and public policy at the University of California, Berkeley, said the new leeway in spending state aid is a worthy effort.

“I think this experiment is overdue and worth trying,” he said. The key question, Mr. Fuller said, is: “Will it be used creatively or will it be abused by district leaders?”

Meanwhile, California is expected to receive a windfall under the federal economic-stimulus law President Obama signed on Feb. 17.

Based on preliminary estimates from the U.S. Department of Education, California will get $1.1 billion under the Title I program for disadvantaged students, $1.2 billion in state grants for special education, and $6 billion as part of the state stabilization fund, money that is primarily designed to help states offset cuts and potential layoffs in K-12 and higher education. A portion of the federal aid pot can also go toward other services. In addition, California will receive smaller amounts under several other federal education programs.

Although some Republican governors have indicated that they might reject the federal assistance, Gov. Schwarzenegger said he is happy to take it.

“We welcome this economic stimulus package,” he said Feb. 22 on CNN’s State of the Union program. “I think it’s terrific and will help us.”

Vol. 28, Issue 23, Pages 15,20-21

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