Plumas SOS newsletter
January 15, 2008

Governor’s 2008-09 January Budget Proposal

The following is a shortened version of an analysis provided by the Association of California School Administrators (ACSA) forwarded to us by PHS principal Kristy Warren.

On January 10 Governor Schwarzenegger released his proposed 2008-09 State Budget declaring a “fiscal emergency” and proposing massive cuts to public education, signaling the start of another difficult financial period for public education.  The following outlines the governor’s proposal, its impact on LEA management and operations, and ACSA’s initial policy response.
  
Overview

The governor’s budget proposes a 10 percent across the board cut for all General Fund departments and programs, including public education.

The 2008-09 proposal would be the largest reduction to K-12 spending in California history, totaling cuts of over $4.4 billion dollars to K-14. It necessitates the second in this decade suspension of the Proposition 98 minimum public education funding guarantee.  The governor proposes to tackle the state’s estimated $14 billion deficit through spending cuts alone and no tax increases.  This leaves public education and other vital state services to bear the brunt and responsibility of the state’s current fiscal crisis.

This is not the first time K-12 education has been negatively impacted by the state’s long-term fiscal crisis, considering the fiscal rollercoaster K-12 has been strapped into since 2000.

And if all that was not enough, California’s public education system has implemented a series of sweeping federal and state academic accountability reforms in the midst of rollercoaster funding. 

The State’s fiscal situation and Proposition 98

The reason for the state fiscal emergency is insufficient tax revenue due to weakening of the state’s economy, showing its first signs early in 2007.  The factors contributing to California’s economic slowdown are not subject of this newsletter. Instead the focus here is on the implications for Plumas County schools.

The governor proposes to suspend Proposition 98. The purpose of Proposition 98 is to guarantee minimum funding for public education. This minimum funding level is linked to current state revenues and the overall health of California’s economy.  The important thing to remember, however, is that it is merely a “minimum” funding floor, which has nothing to do with need and/or adequacy. 

Concerned parents can become active by calling upon your elected legislators. The Legislature has 45 days to respond to the governor’s declaration by submitting their own set of proposals.  If the governor rejects these, the process starts over again.  If the Legislature does not respond in 45 days, they are precluded from acting on any non-budget measure until they submit a response to the governor.

Budget year proposal (2008-09)

In this year’s budget proposal encompasses two items that are important to understand;

1. The governor’s budget proposes a 10 percent across the board cut for all General Fund departments and programs, including every state program except those where the reduction is unconstitutional. The governor believes reductions should be spread evenly throughout all programs so that no individual program is singled out.
2. The governor proposes to suspend the Proposition 98 guarantee and provide 9.2 percent less than the guarantee would have required in 2008-09. This affects funding for K-12, community colleges, and other programs (such as child care), resulting in a lowering of the current-year (2007-08) education funding by $1.4 billion. This puts K-14 at risk of mid-year reductions – a mid-year reduction of $400 million.

As part of the 10% across the board cut reductions to education programs amount to $4.4 billion in 2008-09. Programs affected include Cost of living Adjustments, Special Education, Child Development programs, Before and Afterschool Programs, Child Nutrition Programs, and categorical programs.

No program is exempt from these cuts including programs such as Class Size Reduction, Instructional Materials, Supplemental Instruction, Home-to-school Transportation, Supplemental School counseling and the Charter School Categorical Block Grant.   However, adult education and the charter school block grant receive increases of $18 million and $46.1 million, respectively, because of increases in enrollment.  This increase is calculated prior to the proposed cut to the program. 

Policy proposals linked to the budget

Interestingly, this budget is as much about policy as it is about expenditures.  This year, the governor has put forth several policy proposals within his budget proposal. The details are not subject of this newsletter. Yet the implication of some of these policies may end up placing the state in the position of imposing excessive mandates and sanctions that cannot be funded by federal or state budget appropriations in future years.

In this situation some feel that support and assistance, not sanctions and new mandates, should be the focus.

What will be the practical impacts on school districts?

Mid-year reductions will likely end up being sweep ups of unspent categorical funds and/or minor apportionment deferrals. 

The budget year, of course, is a different story.  The governor’s proposal, as set forth, would be devastating to LEA budgets, programs and academic achievement.  A significant number of school districts and county offices would be forced into fiscal peril.  Ironically, this would likely jeopardize their ability to meet federal No Child Left Behind accountability requirements possibly placing them into Program Improvement or worsen their chances of getting out of PI status.

County office AB 1200 reviews: The Administration is examining what impacts budget year reductions will have on districts’ multi-year projections and county office AB 1200 certifications.  It is possible, that many districts could be certified as qualified and/or negative on future interim reports.  Secretary of Education David Long is looking into this issue and has stated that the Administration will provide policy guidance to COEs and districts on this matter in the near future.

Negotiations: Finally, the budget year proposal creates significant challenges for management teams at the bargaining table.  Districts and county offices that have not settled their 2007-08 negotiations are cautioned to closely re-examine what they have on the table and determine what their budgetary situation might be like under the governor’s January budget proposal.  It is probable that the 2008-09 budget year will see a zero COLA.

Proposed Response

The governor’s rigid 2008-09 budget proposal should be opposed, including the suspension of Proposition 98. Most likely this budget proposal is only the first salvo of a long battle between the state and opposing education stakeholders. 

Readers should be aware of Several “talking points” to keep in mind the ‘big picture’ when discussing the state budget proposal:

• While it is clear there are extraordinary challenges in balancing the state’s budget, our students and schools did not create this budget problem and their progress shouldn’t be undermined because of it.
• According to the ACSA analysis, the governor’s budget reductions would be disastrous to public schools and they are fundamentally inconsistent with the state’s goal of improving student achievement. A $4.4 billion cut to Proposition 98 would mean laying off tens of thousands of teachers and would also result in increases in class size throughout the state, not to mention a further erosion of the support system for students provided by classified and paraprofessional staff. 
• Voters passed Proposition 98 almost 20 years ago to ensure our students and schools receive minimum funding. They strongly reaffirmed their support for the minimum funding law in 2005. Proposals to suspend Proposition 98 conflict with the will of the voters and jeopardize the minimum education funding levels Proposition 98 provides for students and schools.
• According to a report released this week from Education Week; California spends $2,000 less per student than the national average. Other recent studies have shown that California seriously underfunds its public schools, with New York spending 75 percent more than California. The “Getting Down to Facts” studies show that billions more would be necessary to ensure the opportunity for all students to meet the state’s rigorous academic standards. In addition, California has some of the most overcrowded classrooms as well as the greatest shortage of librarians, counselors and other critical support staff in the nation.
• Experts including the Fordham Foundation (one of the nation's leading proponents of rigorous academic standards), the Public Policy Institute of California, EdSource and researchers at Stanford University all confirm that California's K-12 academic and performance standards are among the most challenging in the nation. With hard work, modest investments in teacher training and the adoption of standards-aligned textbooks, our students and schools have been making progress. Reading scores are up 25 percent and math scores have increased 17 percent in the last four years. This progress cannot continue with these proposed cuts to our public schools. 
• A state budget proposal that looks at cuts alone is not a real solution, because it doesn’t address California’s underlying problem of inadequate and unstable revenue sources. We can not talk about spending cuts without also talking about increasing revenues. The most pressing challenge is to enact a balanced budget that continues the momentum of educational improvement that has been built since the late 1990s. This budget does not do that and anything less is unacceptable.