Published Online: January 24, 2012
Published in Print: January 25, 2012, as Tax Debate Again Looms in Calif.

State of the States

Tax Debate Again Looms in Calif.

California Gov. Jerry Brown, whose state has teetered through repeated budget crises in recent years and made major school spending cuts, is again pitching tax hikes as a way to avoid further reductions in education.

The governor, a Democrat, used his annual State of the State address last week to promote a plan to ask California voters in November to approve taxes on individuals earning more than $250,000 a year, and to raise sales and use taxes by half a percent, both on a temporary basis.

Republican state lawmakers in 2011 stymied Mr. Brown's efforts to place a series of tax increases and extensions on the ballot. This year's plan would put tax decisions directly in the hands of California voters.

If the ballot measures are not approved, the state will have no alternative but to pare $5 billion from the budget for the 2013 fiscal year—much of it from K-12, the governor said. California faces an estimated budget shortfall of $9 billion, after closing a much larger fiscal gap of $26 billion last year.

Gov. Brown told lawmakers that a combination of tax hikes and spending cuts to the overall budget—his proposal calls for $92.5 billion in general-fund spending— would help put California's schools on sturdier ground financially. "Neither is popular, but both must be done," the governor said. He argued that his proposal for new taxes was both "fair" and "temporary."

Fewer Tests

He also touted his recent proposals to overhaul California's school funding and testing systems. Mr. Brown is calling for replacing the current funding system with a "weighted student formula" that would provide a basic level of aid and channel additional resources to disadvantaged students and English-language learners.

"This will give more authority to local school districts to fashion the kind of programs they see their students need," he told the legislature, according to a transcript of the Jan. 18 speech. "It will also create transparency, reduce bureaucracy, and simplify complex funding streams."

Gov. Brown said the state's testing system eats up too much class time and is too slow to give schools information that can inform instruction. He said he wants to cut the number of tests and "get the results to teachers, principals, and superintendents in weeks, not months."

Mr. Brown was elected in 2010, returning to an office he had held for two earlier terms, from 1975 to1983. After inheriting a massive budget shortfall, he and the legislature eventually approved an $86 billion state budget that cut spending by 6 percent for fiscal 2012 and cut the K-12 general fund by 4 percent, to $34 billion.

But lawmakers were counting on revenue projections that did not occur, which has left the state with a higher-than-expected shortfall headed into next year.

Vol. 31, Issue 18, Page 20

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