02.15.09: State Budget Update
By David Walrath
The following is the State Budget compromise that would be adopted if the Saturday agreement is passed:
Education
- Does not suspend Proposition 98.
- $8.6 billion in reductions including:
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- $2.3 billion in programmatic reductions;
- $3.2 billion deferral (current-year to budget year);
- $1.1 billion counting current-year appropriation toward Prop. 98 “settle-up; and,
- $618 million Using Public Transit Account (rather than GF) for Home-to-School Transportation.
- Programmatic reduction in K-12 split evenly between revenue limits and categorical programs (categorical cuts are across-the-board).
- No cuts to 4 of the 61 categoricals: Special Ed., Economic Impact Aid, K-3 Class Size Reduction, and School Lunches.
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- Of the remaining 57, across-the-board cuts of about 15% to each.
- Districts given flexibility to move money among 43 of the 57.
- 9 relatively small categoricals are excluded because of unique circumstances (federal requirements, unique populations they serve, etc.).
- Penalties temporarily relaxed for districts that exceed 20:1 in K-3 class size ratio.
Expenditure Reductions:
Prop. 98 Education
- Prop. 98 NOT suspended, but funded at minimum guarantee level.
- Major reductions in current and budget years totaling $8.6 billion, but actual level of programmatic cuts is much less with deferrals, swaps, and other changes making up the remainder.
- Current-year adjustments:
- Programmatic cuts: $2.65 billion.
- K-12 cuts split 50-50 between revenue limits and categorical programs (categorical cuts are across-the-board).
- No cuts to four categoricals: Special Ed., Economic Impact Aid, K-3 Class Size Reduction, and School Lunches.
- Deferral (current-year to budget year): $2.8 billion.
- Counting current-year appropriation toward Prop. 98 “settle-up” $1.1 billion.
- Using Public Transit Account (rather than General Fund) for Home-to-School Transportation: $618 million.
- Budget-year adjustments:
- Programmatic funding: about the same as current year (no COLA).
- Cuts again split 50-50 between revenue limits and categoricals.
- Same categoricals protected as current year (Special Ed., EIA, CSR, lunch).
- Long-term stability for school funding:
- Governor proposed to not recognize $9.3 billion owed to schools as Prop. 98 “maintenance factor” which would have been a permanent reduction, compromise package restores the $9.3 billion over a period of years.
Education Maintenance Factor Recognized at $9.3 Billion but Tied to Spending Cap
In an effort to ensure K-14 education funding restoration in
2011-12 through 2013-14, Assembly Constitutional Amendment 1 would
create a Supplemental Education Payment Account that would be
funded from General Fund revenues in either the rainy day fund or
other state General Fund revenues. This action is intended to
result in K-14 education associations supporting the proposed
spending cap. Simply put: no cap = no $9.3 billion.
Assembly Constitutional Amendment 2 would specify a $9.3 billion
Proposition 98 maintenance factor that would be paid over three
years commencing 2011-12. The effect would be an ongoing base
increase in funding for K-14 education. ACA 2 specifies that $200
million would be used in 2011-12 for Education Code 42238.49. We
believe this will be revenue limit equalization, and the remaining
funds “shall be allocated as an adjustment to revenue limit
apportionments, as specified by statute in a manner that does not
limit a recipient school district with regard to the purposes of
the district for which the money may be expended.”
