A More Optimistic Budget Outlook in California, Other States

By Sean Cavanagh — May 17, 2011 1 min read
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An improving economy has brought a surge of tax revenue into the state coffers in cash-strapped California, which could mean that K-12 schools stand a better chance of avoiding deep budget cuts.

Gov. Jerry Brown released a revised budget proposal this week for his state, which includes more optimistic revenue projections. (Others states, such as Michigan and New Jersey, also have seen their cash flow increase recently.) California, which has a total budget of about $85 billion, is expected to have $6.6 billion more to work with than anticipated.

The Democratic governor has been locked in a standoff with state Republicans over how to close the state’s budget shortfall, which earlier this year was estimated at $26 billion.

Both sides agreed to cuts that would have shaved about $11 billion from that total, leaving $15 billion. The governor has proposed allowing Californians to vote on a series of tax increases and extensions to close the remaining gap—essentially, allowing them to decide whether they wanted to pay more in taxes or see the state make other, deeper cuts, which would fall heavily on K-12, given its share of the budget.

Brown, working with the new revenue projections, says they would allow him to channel an addition $3 billion to the state’s schools, which have seen their per-pupil funding fall from 2007-2008 through today.

The new projections would leave the state with an estimated $10-billion budget gap, he says. Brown says tax measures should still go before voters, to erase what he calls the state’s “structural deficit and wall of debt.” (Though he’s modifying his tax plan in a way that would cost taxpayers $2 billion less.) He argues that doing so is necessary to create a lasting solution to the state’s perpetual budget imbalances.

Brown’s spending plan “reflects the governor’s belief that a budget full of gimmicks or one embracing ‘all cuts’ is damaging to California,” his budget document states. “The preferred—and responsible—alternative is to invest in California’s future by reducing state government, protecting education and public safety through tax extensions, paying down the state’s debt, and adopting powerful economic incentives.”

So while more money is good news, it’s also likely to complicate the debates in many states about how deep the cuts should go, in K-12 in other areas.

A version of this news article first appeared in the State EdWatch blog.