State of the State critiques state fiscal policies
Published: January 3, 2012
Promotional materials for State of the State—the General Session on the final day of CSBA’s Annual Education Conference and Trade Show—promised “a candid look at the complex issues that are sure to impact public education in 2012.”
The speakers delivered.
The wide-ranging discussion was moderated by CSBA Executive Director Vernon Billy, who led a panel composed of CSBA Assistant Executive Director for Governmental Relations Rick Pratt, School Services of California President and CEO Ron Bennett, and School Innovations & Advocacy President Kevin Gordon. What follows are just a few highlights of their freewheeling exchange on the shifting landscape of politics and public education.
Taking the initiative
“2012 is certainly shaping up to be one of the most interesting times in the time that I’ve spent in Sacramento,” Pratt said in his opening remarks. New legislative district maps based on the 2010 census and a new state primary system may help reduce levels of partisanship in the Legislature—although they could have other, unintended effects. Meanwhile, some 70 initiatives—addressing public pensions, state spending and, at last count, five separate revenue-focused measures that will directly affect public schools—are under development, although Pratt and other speakers expect only a fraction to actually qualify for the ballot.
“We get more initiatives when the public thinks the Legislature has failed,” Bennett explained. However, he cautioned, despite polls that consistently show fundamental support for restoring funding to schools, voters tend to reject all initiatives when presented with too many competing choices on the same ballot.
Gordon expressed alarm about a 2012-13 state budget—and local school district budgets—that may be dependent on revenue proposals that wouldn’t be determined until next fall’s election.
“Imagine the idea that we have a budget where we wait until November to find out what our fate is,” Gordon said. That prospect compounded by the irresponsible reliance on funding deferrals, to the tune of some $10 billion in 2011-12, led Gordon to commiserate with his audience: “You have the imperative to budget and act as responsibly as you can, with tremendous pressure around you.”
‘Has Prop 98 outlived its usefulness?’
Voters added Proposition 98 to the state constitution in 1988 to reduce that pressure, but unintended consequences and legislative sleights-of-hand—such as those deferrals—have weakened the purposed school funding guarantee.
“We got cheated out of $2.2 billion by a maneuver on a majority vote that took taxes that would have counted for education and moved them” in the current budget Bennett noted. “Prop 98 really hasn’t protected us during these bad times.”
“I’m glad you said that,” CSBA’s executive director responded, going on to pose a provocative question he said he’d intended to save for the end of the discussion.
“Has Prop 98 outlived its usefulness?” Billy asked the panel. He cited the latest example: an end run around the guarantee by the Legislature this year, when some $2 billion was diverted from the state general fund—and so from the Proposition 98 calculations. CSBA and its Education Legal Alliance led a legal challenge against the maneuver in September; that suit and Robles-Wong, the even more fundamental test of the state’s constitutional obligations to schools, are still working their way through the courts.
“I think Prop 98 outlived its usefulness more than 10 years ago,” Bennett replied. Overall state spending rose 64 percent between 1998 and 2008, while Proposition 98 spending increased just 41 percent; and education has borne the brunt of state cuts since four years of recession began in 2007, he explained. The promised fruits of the school spending guarantee, such as class sizes among the lowest in the nation, and per-student spending among the highest, have been violated in that environment.
“It’s allowed the Legislature in many years to fund schools at the lowest possible legal level and make it appear that schools are doing well, when in fact they are not,” Bennett continued in his critique of Proposition 98. “I believe it’s dead. We need to jack it up, shove something new underneath it and start over.”
“We all know that the budget has never really funded what schools really need,” Pratt largely seconded Bennett’s assertions. However, he mused, “We just don’t know how bad it would have been without 98.”
Gordon—who preceded Pratt as CSBA’s director of governmental relations—credited the association with correctly anticipating the school spending measure’s unintended consequences.
“You were the only major statewide education association that did not support 98. And why was it?” Gordon answered his own question: “It was because CSBA said … ‘You think you’re establishing a floor for public school funding when what you’re doing is probably establishing a cap.’ And guess what? CSBA, in the long run, probably ended up being correct.”
Deferrals pose problems
Schools have been subjected to funding deferrals for several years now amounting to nearly $10 billion owed schools.
“It’s something that we don’t want,” said Pratt. “On the other hand, neither do we want the cut that would occur if we didn’t get the deferral.”
Cross-year borrowing is possible through CSBA’s Tax Revenue and Anticipation Notes program, Pratt pointed out; however, “what happens when interest rates start to go up from their record lows?”
Breaking the cycle of deferrals is problematic, he continued, because it would mean schools would have to take a real cut that year.
The State of the State presentation marked Pratt’s last public appearance as CSBA’s legislative director. He’s now the state Assembly Education Committee’s new chief consultant, a position which in which he will wield tremendous influence on state school policy. He’s been succeeded at CSBA by Dennis Meyers, formerly the assistant executive director for governmental affairs at the California Association of School Business Officials and a former school board member with Washington Unified School District in West Sacramento.