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Analysis & Opinion: How Governor Brown’s Budget will Impact our Neighborhood Schools

The Eddy presents the first in an on-going series of education policy analysis by Suz Howells, President of the Santa Cruz Education Foundation.

Today Governor Brown laid out his proposed budget designed to press the reset button on California’s fiscal crisis.  The budget assumes an 18-month deficit of $25.4 billion; $8.2 billion in the current 2010-11 fiscal year; $17.2 billion next year.  In total, state leaders will need to solve for $26.4 billion, the additional $1 billion a result of restoring a rainy day fund.  How does the governor propose to do that?

His proposal includes $12.5 billion in cuts to virtually every state function except K-12 schools and an extension of taxes for an additional 5 years that would bring in $12 billion with the balance coming form a variety of other smaller funding shifts.  Tax extensions on sales, vehicles and income would be put to the voters in a June special election.

The proposal also calls for a “realignment”, which would shift responsibilities and revenue (and associated program costs) to counties, cities, school districts and local agencies.  Shuttering redevelopment agencies as early as July of this year would move billions of property tax dollars into local coffers.

What does this all mean for education?  At a glance, it is encouraging.  Governor Brown recognizes that the past three years of fiscal crisis have fallen heavily on schools. In his declaration of a fiscal state of emergency for California schools last week, State Superintendent of Public Instruction Tom Torlakson pointed out that schools have shouldered $18 billion in cuts since 2008. “Educators are making heart-wrenching decisions so they can meet their fiscal obligations, but these kinds of cuts endanger the quality of student learning today and our future economic competitiveness as a state tomorrow,” Torlakson said. By statute, schools must balance their budgets and take the reductions in state budget proposals.  Other agencies, e.g. Dept of Corrections, have seen cuts on paper only, never realized.

However, even “sparing” K-12 still means more reductions.  The proposed budget assumes that the Proposition 98 formula used to determine K-14 funding will remain flat for 2011-12 from this current year.  But due to a declining economy, the revenue calculations* assume that even by preserving Prop 98 funding, schools will see $2 billion less this year.  Should voters decline tax extensions in June, schools will immediately lose another $2 billion and bear a major share in the resulting $12 billion hole in state finances.

Where does this leave Santa Cruz City Schools?  As a general rule, every $1 billion cut to education at the state level results in a $600,000 reduction to our district budget. Potentially, the District may need to produce two budgets; one that factors in proposed revenues and limits new reductions to approximately $1.2 million; another that accounts for a doomsday scenario without new revenues.

We are fortunate beneficiaries of the foresight of our school leaders and our generous community.  Because our district budget carries over federal stimulus jobs funds into next year, and due to the savings resulting from sacrifices such as the 5-day reduction to the school year, we will have some buffer from the impact.  Factoring in the proceeds from voter-approved parcel taxes, we should be able to preserve most student programs IF state voters approve extended taxes in June.

By shutting down redevelopment agencies, we could see additional funds, possibly as much as $600,000 (the budget forecasts $1 billion for schools statewide) beginning in the 2012-13 school year, with some yet to be determined allocation based on property taxes in the latter half of this year.  As existing debt burdens decline, future RDA proceeds would flow to local agencies, including schools, via property taxes.

The bottom line for our neighborhood schools is continued austerity, a focus on efficiency and protecting the classroom experience – and a very real dependence on the June special election.  Governor Brown explicitly acknowledges that it will take every parent, every teacher, every PTA in the state working together to campaign hard for those revenues.  The future of our schools depends on it.

Download the proposed budget here (4.2 MB)

* Edited 1/12 to clarify that the $2 billion difference is due to deferring payments owed to schools into the next school year. It is still, in effect, a reduction to schools in the 2011-12 school year.