Not long after he took office in January, California Gov. Jerry Brown presented residents of his state with a simple, stark plan for correcting the state’s massive budget imbalance.
The Democrat called for making deep and painful cuts to programs across government, while sparing schools. To raise revenue, he proposed allowing the public to vote on a series of tax increases and extensions, which he said would provide enough money to avert even larger cuts to the state budget, particularly to K-12 programs.
The state legislature agreed to make cuts. But Mr. Brown’s plan to raise money through taxes has so far failed to win the Republican support it needs to get on the ballot, leaving California’s school systems in a state of uncertainty. The state’s school districts, which serve more than 6 million students and have seen their per-pupil aid fall from three years ago, could be forced to make extensive layoffs, raise class sizes, and eliminate more programs and services if state funding is cut again.
The governor has sought to break the legislative impasse by launching a public campaign to try to persuade enough Republicans to help him place his tax plan on the ballot, possibly this coming fall. If that doesn’t work, he says, he will support a separate effort to collect public signatures to put a ballot measure before the voters.
“People are talking about government as the problem, government as the enemy, [saying] starve it, squeeze it,” Gov. Brown said in an April 28 speech before the California state Parent Teacher Association. “But when government shows up as a teacher in a classroom with 30 kids, that’s a different picture. ... They’re not the problem. They’re the solution. They’re the future.”
Republicans say the governor is presenting the public with a false choice between raising taxes and cutting school budgets. They have called for him to take more serious steps toward controlling state costs by placing firm caps on state spending, making workers’ pensions less generous, and encouraging cost-saving measures, such as establishing private contracts for services in K-12 systems.
“Jerry Brown is threatening education to save bureaucracy, rather than cutting back on the bureaucracy to save education,” Tom Del Beccaro, the chairman of the California state Republican Party, said in an interview. Without stronger cost controls, he said, the state “will be having the exact some conversation a year from now.”
Search for Votes
The Golden State is hardly alone in its financial troubles. Forty-four states are projecting budget shortfalls for fiscal 2012, and their tax collections, adjusted for inflation, are 11 percent below pre-recession levels, according to the Center on Budget and Policy Priorities, a Washington research organization.
California’s budget woes were obvious well before Gov. Brown arrived in office this year, succeeding Republican Gov. Arnold Schwarzenegger, who couldn’t run for re-election because of term limits. At the time, the state, which had an annual budget of about $92 billion in fiscal 2011, faced an estimated 18-month budget shortfall of $26 billion.
Mr. Brown, who also served as governor from 1975 to 1983, proposed an $85 billion spending plan for fiscal 2012 that called for sweeping cuts across state government, but kept K-12 spending level, with a general fund of about $32 billion. Lawmakers in March approved a series of spending bills that chopped an estimated $11 billion from the state’s budget gap, through broad reductions in areas affecting the poor, developmentally disabled, and elderly, as well as universities, parks, and many services.
To make up the remaining shortfall, estimated at about $15 billion, the governor, as he pledged to do during his campaign, has proposed letting Californians vote on whether they want to close the gap by raising and extending taxes, or by cutting K-12 and other programs. Mr. Brown, however, needs two Republican votes in both the Democratically controlled state Senate and Assembly to win the two-thirds majority to place those items on the ballot. So far, he has not been able to pick up that GOP support.
‘Scare Tactics’
In March, Mr. Brown publicly called off negotiations with Republican lawmakers, saying they had presented him with unrealistic demands. While he still hopes to gain legislative approval, he also is considering supporting an initiative to gather votes from residents to place tax measures on the ballot, said his spokesman, Evan Westrup. Normally, such initiatives must qualify for the ballot 131 days before the vote, according to the California secretary of state.
Mr. Brown believes public sentiment favors a public vote. He points to a poll released last month by the Los Angeles Times and the University of Southern California, which showed that 60 percent of Californians favored having the state hold a special election, while 35 percent opposed it, and 5 percent were undecided or didn’t respond. An even greater proportion of residents, 71 percent, said they opposed the state approving an “all-cuts” budget with no tax increases if it resulted in reductions to K-12 education funding. The poll, conducted April 7-17 among 1,500 registered California voters, had a margin of error of plus or minus 2.5 percentage points.
But Republicans say those results are misleading, and they dispute the idea that Californians are willing to pay more in taxes. GOP lawmakers say they want Mr. Brown to support a cap on future state spending, reduced government regulations, and cuts to state pensions for teachers and other workers, arguing that those retirement systems are placing a heavy burden on taxpayers.
State pension systems have become a major target for budget cuts by governors and lawmakers this year in other states, as they scramble to find new ways to cut spending and reduce those systems’ unfunded liabilities. California contributes $1.2 billion of its budget annually to the California State Teachers’ Retirement System, which has 852,000 members and beneficiaries, including teachers, and carries an unfunded liability of $56 billion. Teachers contribute 8 percent of their salaries to the plan.
Gov. Brown has proposed legislation to reduce pension costs in a number of ways, including ending “spiking”—the practice of increasing public employees’ compensation late in their careers in order to sweeten their retirement benefits. Many Republican lawmakers view those changes favorably but say deeper cuts to the pension system are needed.
Republican state Sen. Bob Huff, who serves on his chamber’s education committee and is the ranking member of its budget committee, said the governor is using “scare tactics” to try to muster support for a tax increase, as opposed to encouraging districts to rethink how they do business.
Cut, and Innovate?
Instead of automatic, annual pay raises, Mr. Huff argued, state officials should be pressing districts to control costs through means such as allowing school systems to hire private contractors for noninstructional services, and encouraging them to pay employees based on merit—a step some other states have taken.
“In the public schools, we tend to march on, business as usual, doing things that hurt kids,” Sen. Huff said. “We’ve gotten so lopsided in the way that we fund government” and education.
The budget impasse is causing confusion in many of the state’s school districts, which are trying to prepare budgets for fiscal 2012 without knowing how much state aid will be available, said Adonai Mack, a legislative advocate for the Association of California School Administrators.
Over the past few years, districts have put in place furloughs, cut staff, and left jobs unfilled—particularly among counselors and instructional aides, Mr. Mack said. They’ve also raised class sizes and eliminated programs, such as those for the gifted and talented. State per-pupil spending has fallen to $7,820 in 2010-11 from $8,235 in 2007-08, according to the California legislative analyst’s office.
Mr. Mack predicted that the districts would be forced to lay off many more employees if the state budget for schools shrinks over the coming year.
“We’ve cut around the periphery,” he said. “We’re now [reducing] people.”
The questions facing schools are evident in the 9,000-student Menifee Union school district, located a few hours southeast of Los Angeles. The school system has left many open teaching positions unfilled—as an alternative to laying off employees—and its average class sizes have risen to about 28 students per teacher in grades K-3, from about 20 students a few years ago, said Robert Wolfe, the district’s assistant superintendent for business services.
Mr. Wolfe is trying to craft a budget to submit to his district’s school board by June, though there’s a lot of guesswork involved because of questions about state aid. Layoffs are a possibility next year. The business official said his district has made sacrifices to keep expenses low, and he wants the public to be given the option of preventing future K-12 cuts.
“I’d like to see it put on the ballot,” Mr. Wolfe said. “We’ve sort of fixed the expenditure side. Now it’s time to do something about the revenue side.”
