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Governor Brown Drops Insistence on Tax Extensions This Year

Democrats Push Through Budget Deal – Schools Get More Deferrals, and Midyear "Trigger Cuts" Loom

By Jeff Hudson - June 29, 2011

California’s longstanding budget stalemate came to a swift conclusion this week. On Monday afternoon, Gov. Jerry Brown and the two Democratic legislative leaders, Senate President pro Tem Darrell Steinberg (D-Sacramento) and Assembly Speaker John Pérez – held a “press availability” webcast, announcing they had agreed on a budget bill that the Legislature could approve on a party-line vote . . . one which Gov. Brown (who had vetoed a previous Democratic budget bill two weeks earlier) was willing to sign.

The California Assembly and California Senate voted through the budget bills on Tuesday evening with a simple majority of Democratic votes, with no Republican legislators backing the plan. Gov. Brown is expected to sign the bills on Wednesday or Thursday.

For K-12 education, the budget package includes what are variously described as $2.1 billion in new state deferrals (as estimated by Supt. of Public Instruction Tom Torlakson) to $3 billion in new state deferrals (as estimated by California Teachers Association president Dean Vogel).

The budget package is also built on what is widely regarded as an optimistic assumption that state revenues will rise by some $4 billion. If state revenues do not rise by that amount (to be determined by the state’s Department of Finance by December 15), then some $2.5 billion in “trigger cuts” will go into effect.

Those “trigger cuts” could include a $1.5 billion reduction in state funding for K-12 education, including an option that would allow school districts to reduce the number of classroom days in the school year by seven (to a total of 168 days). Three years ago, a school year of 180 days was common in many California school districts.

Other “trigger cuts” would include $248 million in funds for school transportation (which would eliminate school buses in many districts).

These “trigger cuts” for school districts would take effect on Jan. 1, 2012, except for the school year reduction, which school districts could begin to impose on Feb. 1, 2012.

The budget package also includes new cuts to higher education, and new deferrals of funds to build state courtrooms. There are also new fees (in the form of an increased vehicle license fee, and a fire safety fee on rural homes) that will likely be challenged in court.

In agreeing to this budget deal, Gov. Brown dropped his longstanding insistence that California voters get a chance to vote on the extension of existing sales and income taxes – at least this year. Those temporary taxes, approved three years ago, will now sunset as the month of June ends. Brown hinted at the possibility of a ballot measure in November 2012 to authorize tax extensions, but there was a distinct lack of enthusiasm on that point by Steinberg and Pérez.

Asked by a reporter how he will square the education funding requirements under Prop. 98 with the new state budget, Brown quipped over his shoulder “very legally and creatively” as he walked out of the room during Monday’s press availability webcast.

In a statement released Tuesday evening, Gov. Brown sounded a more hopeful note, saying, “Democrats in the California State Legislature made tough choices and delivered an honest, balanced and on-time budget that contains painful cuts and brings government closer to the people through an historic realignment.  Putting our state on a sound and sustainable fiscal footing still requires much work, but we have now taken a huge step forward.”

Dean E. Vogel, president of the California Teachers Association, released a statement in which he basically expressed the sentiment that it could have been worse: This is certainly not a perfect budget plan, but it is what Democratic lawmakers and the Governor were able to do in light of the Republicans’ refusal to work with them to pass a budget that would temporarily extend revenues to protect our students, schools and our state. We commend Democratic lawmakers for engaging in the work they were elected to do.

Vogel added, “While this new plan is far from what our schools and colleges need to provide all students a quality education, it protects them from much worse cuts and will help local school districts and colleges plan for the coming year.  The proposal defers nearly $3 billion in funding to K-14 schools and cuts $300 million from higher education.  This year as thousands of educators were laid off, class sizes pushed higher, the school year shortened, student programs eliminated, and college tuition fees increased, Republican lawmakers simply watched and offered no honest solutions that would even maintain California’s current level of funding to public education.”

Vogel concluded, “Educating the children of this state and building a better future for all of us should not be a partisan issue. But Republicans hijacked the state budget process and refused to put the needs of our children above their own special interests. Our students deserve a better example and a better chance at a well-rounded and adequately-funded education.”

State Superintendent of Public Instruction Tom Torlakson said on Tuesday, “The financial emergency facing California’s schools began long before the debate over this year’s budget. While I strongly supported the Governor’s proposal to extend the temporary revenues, I accept his judgment that no bipartisan agreement could be reached. I am grateful that the Governor and the Democratic Leadership have crafted a budget that — for the time being — avoids a new round of deep cuts to education. This budget means another year with California’s schools on financial life support.”

However, Torlakson also warned “The risk of $1.75 billion in mid-year reductions, as well as $2.1 billion in added deferrals, will force some districts to make cuts that will harm our students and their schools. I welcome the Governor’s call for an initiative to help put our state’s finances back on solid ground. We must seize the opportunity to bring Californians together around a shared vision and a common goal of making our schools great again.”

The reaction from leaders in higher education was more negative. California State University system Chancellor Charles B. Reed said “This budget is a great disappointment for the California State University.  It is a shame that the legislature was unable to reach a compromise that would have kept taxes at current levels and prevented further massive cuts to the public’s universities.

Reed continued “This budget will cut the CSU by at least $650 million – nearly one-fourth of state operating support – and the effects will be felt throughout our 23 campuses and among our 412,000 students.  The proposed 'trigger cut' of another $100 million is especially problematic because the trigger won’t be pulled until classes for our last semester of the fiscal year have already started and it is too late for campuses to respond in any practical way.  This makes it impossible to plan and carry out our mission with any stability.”

Reed concluded, “If the trigger is pulled, our cut will total $750 million.  State support for the CSU will be at its lowest level in 14 years, even though we currently serve 90,000 more students.  California’s economy cannot fully recover, nor can its future promise be fulfilled, by starving its universities.

Mark Yudof, President of the University of California system, said “The latest state budget plan is deeply disappointing. If the Governor and Legislature impose $650 million in funding cuts on the University of California, the impact will be felt by Californians in every part of the state. Because cuts of this magnitude inevitably will drive up tuition for public university students and their families, we cannot stand silent. While we recognize the enormity of the fiscal challenge facing the state, we continue to oppose further cuts, and support any efforts that will restore long-term stability to state funding of higher education.

Dr. Arun Ramanathan, Executive Director of The Education Trust — West, offered this somewhat gloomy assessment. “While Democrats slap each other on the back for their ‘budget’ deal and Republicans applaud their efforts to prevent any tax increases, California’s poorest students are once again getting a raw deal from our state’s leadership. The potential budget deal is based on Wizard of Oz assumptions that there’s a pot of gold at the end of the rainbow. If that pot of gold does not materialize, our poorest students and most vulnerable communities will once again take the brunt of state budget cuts through inequitable approaches such as shortening the school year. It is long past time to develop a real budget solution that solves the boom and bust cycles of California’s state budget.”

“We have seen courageous Democrats and Republicans in other states forging the difficult compromises and showing the visionary leadership necessary to confront entrenched interests and solve their states’ fiscal crises. As long as California’s children and communities are at the mercy of lawmakers beholden to special interests from public employee unions to taxpayer associations, we will continue our pattern of smoke and mirrors budgeting. The result will always be reprehensible cuts that force our children to pay the long-term price for our current dysfunction.”

Editor's Note:  Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writer in print, radio and television media.