Capitol Recap

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The following offers highlights of the recent legislative sessions. Enrollment figures are based on fall 2002 data reported by state officials for pre-K-12th grade in public elementary and secondary schools. The figures for pre-collegiate education spending do not include federal flow-through funds, unless noted.


Deep K-12 Cuts Averted;
Higher Ed. Not So Lucky

California, facing one of the most dire fiscal crises of all states, passed a $99 billion fiscal 2004 state budget in late July, just in time to give out its monthly checks to school districts.

Golden State lawmakers have seldom passed a budget by the July 1 state constitutional deadline, but this year, a 2002 state supreme court decision barred state agencies from operating under temporary spending resolutions.

Gov. Gray Davis

25 Democrats
15 Republicans
48 Democrats
32 Republicans
6.8 Million

The situation had been looking grave for local governments and school districts. Schools would not have been able to receive funds for about one- third of their expected budgets, including programs such as special education, technology, and after-school services. Charter schools would not have received funding for their programs. And state employees and lawmakers would not have received their paychecks.

The predicament put the legislature, which had been gridlocked in a partisan standoff for months, and Gov. Davis, who is facing a recall election, under intense pressure. In the end, they produced a budget that attempts to patch a record $38 billion budget deficit by cutting programs, issuing bonds, and using accounting maneuvers to reduce the shortfall to an estimated $8 billion.

As a result of those steps, K-12 education did not see the dramatic cuts that were feared. It received $41.3 billion, a decrease of $300 million from last year. The allotment amounts to a 2.5 percent decrease in per-pupil funding, to $6,900, because of enrollment increases, but still complies with Proposition 98, the state's constitutional guarantee of minimum funding.

Higher education, however, saw some significant cuts—and, for the first time, lawmakers chose to cap the enrollments at the state's university system because they could not afford to accommodate the growing numbers of students.

That move reverses a long- standing state guarantee that every qualified high school graduate would have access to a slot at the California State University system, or at a community college. Further, tuition at the state's university systems and community colleges has increased by at least 30 percent this year to recoup some of the costs of the cuts, a move many believe will discourage low-income students from furthering their education.

—Joetta L. Sack

North Carolina

Despite Increase in Aid,
Budget Woes Not Over

After several years of state fiscal troubles, and with deficits again anticipated this year, North Carolina lawmakers passed a fiscal 2004 budget that provides $6 billion for education, a 2.4 increase over the previous budget.

The legislature passed the $14.8 billion budget with uncharacteristic speed this summer, and Gov. Michael F. Easley signed it June 30. In the past several years, budget wrangling had continued into the fall.

Gov. Michael Easley

28 Democrats
22 Republicans
59 Democrats
61 Republicans
1.3 million

The state budget includes $43 million for the governor's "More at Four" preschool plan. The $8.6 million increase will pay for expanding the program to all of the state's 100 counties.

Some $25 million of the education budget will go toward reducing the number of students in the state's 2nd grade classrooms to 18. The state has been phasing in the governor's class-size- reduction plan in kindergarten and 1st grade over the past two years. The initiative is ultimately expected to include 3rd grade classrooms as well.

Another $10 million will go to the state's lowest-performing schools to further reduce class sizes in K-3 and pay for other initiatives to help raise achievement.

The legislature also voted to continue funding the state's accountability plan for schools, including nearly $100 million in bonuses for teachers and staff members in schools that met or exceeded state expectations on state tests at the end of the last school year. Earlier this month, however, state officials realized that amount will fall some $40 million short of what is needed, after test scores showed far greater improvement at more schools than was projected. ("Bonus Dilemma," State Journal, this issue.)

Meanwhile, some areas will experience considerable cuts.

Vocational education for 7th graders, for example, will be reduced by $8 million, or 32 percent. Another $800,000 in state funding will be eliminated from a school breakfast initiative for children who are not eligible for the federal free- and reduced-price-lunch program.

North Carolina will maintain sales- and income-tax increases introduced last year as the state tackled a $2 billion deficit. But the budget outlook is particularly precarious now, some observers said.

"Budget problems have been delayed, not resolved," according to an analysis by the Public School Forum of North Carolina. "If the relatively optimistic revenue projections used to balance the budget fail to materialize, the state could be faced with its fourth consecutive year of budget deficits."

—Kathleen Kennedy Manzo

Vol. 23, Issue 4, Page 26

Published in Print: September 24, 2003, as Capitol Recap
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