Assembly panel’s proposal would boost school funding

Analysis from CSBA's Governmental Relations Department

Earlier today, the Assembly Budget Subcommittee on Education took the first positive action of the budget season. On a party-line vote, the subcommittee chaired by Assembly Member Julia Brownley, D-Santa Monica, approved a budget for education that provides more money than previously proposed by Gov. Arnold Schwarzenegger, Legislative Analyst Elizabeth Hill or legislative Republicans.

The subcommittee Democrats are assuming that additional revenues would raise the 2008-09 Proposition 98 education guarantee by $2.3 billion over the amount proposed in the governor’s May budget revision. They plan to fully fund the higher guarantee of approximately $59.1 billion. This would yield enough money to reject all of the proposed cuts to K-12 proposed by the governor, including restoring funding for deferred maintenance. The plan would also provide a 1.6 percent across-the-board cost-of-living adjustment. The increased funding would still fall short of the amount needed to provide the full 5.66 percent COLA, so there would be a revenue limit deficit of 3.8 percent. In addition, the plan would reject all of the governor's flexibility proposals, such as lowering school districts’ required reserves for economic uncertainty, allowing greater flexibility between Assembly Bill 825 block grants and reducing the requirement for certain maintenance accounts.

With regard to the state lottery, at this point we do not expect the Assembly to accept the governor's securitization proposal, though lawmakers may take some action regarding the lottery in the future. We also do not expect the Assembly to approve the governor’s proposed Budget Stabilization Act, which would allow a governor to take significant budgetary action without the approval of the Legislature. These are all pieces of the puzzle, however, and they may end up as trade-offs during budget negotiations.

The Assembly plans to bypass both its full Budget Committee and floor and have all subcommittee reports go directly to the Assembly-Senate Conference Committee.

In the state Senate, subcommittees have also met, but the education subcommittee has not yet taken significant action for K-12 education. The Senate is also taking a different approach to the budget and has been holding hearings of the full budget committee, in addition to the subcommittees.

While CSBA spoke in favor of the Assembly subcommittee proposal, we recognize this action, albeit significant, is just one part of the process, and much more has to occur in the coming weeks (and, perhaps, months) in order to get a budget that provides a balanced approach to tackling the state’s deficit. What happens next remains anybody’s guess.