Looming Budget Cuts Fuel California Fury

K-12 faces $360 million hit as educators warn of impact from state ‘fiscal emergency.’

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As Gov. Arnold Schwarzenegger faces one of California’s toughest economic periods since he first was elected in 2003—leading him to declare a “fiscal emergency” likely to produce deep budget cuts—he isn’t getting much sympathy from the state’s education community.

Reminding the Republican governor that he promised to focus on improving the education system this year, school leaders and advocacy groups are venting their frustrations over proposed midyear education funding cuts, as well as cuts in core education programs of close to 10 percent in fiscal 2009.

Parents and Students for Great Schools, a coalition of groups representing many poor and minority families, calls the governor’s proposals “unworkable and reckless.”

And state Superintendent of Public Instruction Jack O’Connell says the plan is “a giant step backward.”

“I fear that the ‘year of education’ will become the year of education evisceration,” Mr. O’Connell said in a statement, referring to the label the governor had earlier promised for 2008. “This budget will not help us close the achievement gap that threatens the futures of our students and our state. It will not help us effectively prepare the well-skilled workforce our state desperately needs to remain competitive.”

Elizabeth Hill, the state’s nonpartisan legislative analyst, also criticized Mr. Schwarzenegger’s plan in a report this week, saying that the administration’s approach could leave many programs “operating in a less-than-optimal manner.”

California schools aren’t the only ones bracing for possible cuts in funding this year.

See Also
See other stories on education issues in California. See data on California's public school system. Also see our Finance page.

To try to close a $500 million deficit, Nevada Gov. Jim Gibbons has taken a 4.5 percent, across-the-board cut from every state agency. Education, which Mr. Gibbons, a Republican, originally said he would spare from budget reductions, is expected to see about $96 million less over the 2008 and 2009 fiscal years. The $8.8 billion fiscal 2008 budget allocates $1.5 billion for education.

According to state fiscal reports last fall, at least 15 states were expecting similar shortfalls. ("States May See Fiscal Squeeze on Education," Jan. 9, 2008.)

Deadline for Action

In California, the legislature continued in special session this week to consider Gov. Schwarzenegger’s plans for dealing with a $3.3 billion budget deficit in fiscal 2008—a proposal to slash roughly 10 percent from each department’s budget.

The governor’s Jan. 10 declaration of a fiscal emergency—allowed under Proposition 58, the 2004 ballot initiative that requires the state to pass a balanced budget—was the beginning of a 45-day period in which lawmakers must take action on the budget. If they don’t, they can’t adjourn or move forward with any other pieces of legislation.

Gov. Schwarzenegger is recommending a $360 million cut for K-12 schools below the spending level required under the state’s Proposition 98 school finance guarantee in the current fiscal year, bringing the K-12 budget to $56.7 billion. An exception can be made to the required spending level under some circumstances.

For fiscal 2009—in which the deficit is expected to grow to more than $14 billion—his budget calls for suspending the Proposition 98 guarantee, meaning schools would receive $4 billion less than they were originally expecting for fiscal 2009, or about $55 billion. Areas hit by cuts would include cost-of-living raises, special education services, and slots for children in early-childhood-development programs.

While the administration says attrition should take care of most of the slots that the governor is proposing to eliminate, early-childhood-education advocates aren’t so optimistic.

“Watch those waiting lists go up,” Tim Fitzharris, a lobbyist for the Child Development Policy Institute, said in a bulletin to advocates.

Mr. Schwarzenegger is also calling for a $59.6 million cut in spending for after-school programs under Proposition 49, a ballot measure that he campaigned for prior to being elected governor. He had argued against a recommendation to repeal Proposition 49 in 2005.

Scott Plotkin, the executive director of the California School Boards Association, said that while the midyear cuts might be manageable, districts don’t have any “big-ticket items” left to cut in order to absorb the reductions proposed for fiscal 2009.

“There doesn’t seem to be any way to get around pretty significant layoffs,” he said. School districts, which subsidize the state’s incentive program for class-size reduction, will also probably look at raising class sizes to save money, Mr. Plotkin said.

The California Teachers Association, an affiliate of the National Education Association, sued the governor in 2005 when the state didn’t immediately repay the $2 billion it borrowed from Proposition 98 to help balance the budget in fiscal 2005.

A settlement in the case was reached in 2006. But now the CTA is facing another potential battle with the governor over Proposition 98, a finance formula that sets a minimum funding level for schools and community colleges.

“Any structural budget reforms must protect Prop. 98, as well as provide the stable funding our students and schools deserve,” David A. Sanchez, the president of the 340,000-member union said in a press release.

He added in an interview that if Proposition 98 provisions are suspended for fiscal 2009, the union and other education groups might consider legal action again.

“There is always a chance that something could happen like that,” Mr. Sanchez said. But he added that he hoped the legislature would work with the CTA and other education groups in “trying to keep this crisis away” from the classroom.

Seeking Alternatives

Gov. Schwarzenegger, meanwhile, is pushing strongly for a constitutional amendment to present to voters in November that would provide lawmakers with additional control over spending when revenues are flat.

His proposed Budget Stabilization Act, if approved, would build up revenues during prosperous times by requiring automatic deposits to the state’s “rainy day” fund.

The California Federation of Teachers, an affiliate of the American Federation of Teachers, and other groups have called on the governor to reinstate a vehicle-license fee, which Mr. Schwarzenegger, now in his second term, got the legislature to repeal shortly after he was first elected. The fee would raise roughly $4 billion a year for the state’s general fund.

But the governor has stood firm on the repeal of that fee.

While the governor has left many educators disappointed with his proposed cuts, some observers are hoping that progress can still be made through the series of hearings that he plans to hold to address some of the issues raised by a major research reports on governance and finance released last year. ("California’s Schooling Is ‘Broken,’" March 21, 2007.)

“Even in this year’s daunting budget climate, long-term, inclusive dialogue needs to continue among government, business, and education leaders,” Richard C. Seder, a consultant for the California Student Success Project, said in a press release. The campaign was initiated by consultants working with the state to engage the public in a “year of education.”

He added that the project would remain “focused on promoting this important dialogue.” K-12 faces $360 million hit as educators warn of impact from state ‘fiscal emergency’

Vol. 27, Issue 20, Pages 17-19

Published in Print: January 23, 2008, as Looming Budget Cuts Fuel California Fury
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