07.02.09: Action Alert: Governor Proposes Suspension of Proposition 98
By David Walrath
On July 1, 2009, the Governor proposed the suspension of Proposition 98 by $3 billion from the newly recalculated Proposition 98 minimum guarantee for 2009-10. [The minimum guarantee for 2009-10 increased because the 2008-09 education cut bill was not enacted by midnight June 30, 2009.] If the Governor’s proposal were adopted, it would have two effects: 1) Reduce the Governor’s 2009-10 May Revision proposed school funding by $1.4 billion (if all were taken out of revenue limit, that would increase the proposed 17% deficit factor to being well over a 20% deficit factor); and 2) increase the 2009-10 Proposition 98 maintenance factor by $3 billion.
The Small School Districts’ Association (SSDA) opposes a Proposition 98 suspension and believes schools must fight Governor Schwarzenegger’s proposal. If we can stop the suspension proposal, schools would be able to receive an additional $1.6 billion in 2009-10 compared to the Governor’s May Revision.
The Governor’s Proposition 98 suspension proposal would result in an additional school funding cut of approximately $225 per pupil. If the suspension is defeated, then the additional cut is avoided AND schools would receive an additional almost $250 per pupil in 2009-10 compared to the May Revision. By the nature of the Proposition 98 guarantee, the additional funds would then continue into 2011-12 and thereafter.
Schools also need to fight the suspension to protect possible additional 2009-10 maintenance factor funding if the state’s economy improves more rapidly than anticipated.
The last time Proposition 98 was suspended, the state’s economy did improve and the effect was that schools were unable to benefit from that economic improvement. Governor Schwarzenegger kept those funds for other purposes and had to be sued by the California Teachers Association and others in order to recover the funds diverted by the Governor.
Having been burnt by suspension once before, SSDA believes school districts need to fight the Governor’s Proposition 98 proposed suspension. SSDA has adopted the following budget priorities for 2009-10:
1) Oppose Governor Schwarzenegger’s Proposition 98 suspension proposal;
2) Full fund the home-to-school transportation allocation by reversing the proposed 20% cut; and
3) Use any remaining new funds to proportionally restore revenue limit deficit cuts and categorical aid cuts that are part of the 2009-10 state budget.
[The proportional restoration concept is that if revenue limits took 75% of the cut, revenue limits should be restored with 75% of the new money; if categorical programs took 25% of the cut, then categorical programs should be restored with 25% of the new money.]
SSDA urges all members to inform their communities of the effects of the Governor’s suspension proposal. The suspension proposal would effectively cut schools an additional $1.4 billion in 2009-10 beyond what was proposed in the Governor’s May Revision.
The suggested message is:
Schools have already taken major cuts. School districts should not be denied the revenue from an increase in the constitutional Proposition 98 minimum guarantee for education funding. Even with the minimum guarantee funding, schools will need to make major cuts for the 2009-10 school year.
School leaders have already advised their communities of the cuts that have been made because of the current fiscal crisis. Please continue to use that information as the basis of why you are unable to take the Governor’s July 1 additional cuts for 2009-10.
