Trigger pulled as expected, schools cut $328 million this year
Published: January 3, 2012
Gov. Jerry Brown’s Department of Finance announced on Dec. 13 that revenues were $2.2 billion less than lawmakers anticipated when they approved the budget in June. This represents a more optimistic estimate of the state’s fiscal health than the Legislative Analyst predicted in November and is based on more up-to-date revenues.
However, because the estimates are still below what was approved in June, cuts of nearly $1 billion will be triggered effective Jan. 1 – except for revenue limit cuts, which will take effect Feb. 1. For K-12 it will result in a cut to home-to-school transportation of $248 million and a cut to revenue limits of $79.6 million. In terms of average daily attendance, the revenue limit cut equates to approximately $13.30 per ADA. The combined total of the transportation and revenue limit cut equates to about $55 per ADA on average.
As structured in the state’s spending plan for 2011-12, which estimated that revenues would increase $4 billion above the May Revision, the cuts would be implemented on a sliding scale depending on the revised estimate of revenues. If revenues fell $1 billion below the budget, $600 million in cuts would be made to the University of California, California State University and California Community College systems, In-Home Support Services and public safety among others. If revenues were $2 billion or more below estimates, a second tier of cuts would be implemented. Included in this tier were the cuts to K-12, as well as additional reductions to community colleges and childcare.
Because estimates show that state revenues are down by $2.2 billion, the first tier of cuts will be fully implemented. The full cut to school district revenue limits in the second round will be mitigated and result in a nearly $80 million loss instead of the possible $1.5 billion. Although the cuts could have been even more severe, districts still must make substantial reductions with only six months left in the year—after having already taken $18 billion in cuts and deferrals made over the last three budget years.
The state still faces multi-billion dollar deficits over the next few years. During the press conference announcing the revised revenue estimates and subsequent reductions, Brown stated his intent to address these head on and not rely on previous tactics of “gimmicks and delays.” The governor also noted that his January budget proposal for 2012-13 would include less funding than schools are expecting.
The governor said that the January proposed spending plan would include similar trigger language if voters reject the revenue proposal he submitted in December for the November 2012 ballot. While recent polling by the Public Policy Institute of California shows voters favor the governor’s proposed temporary tax increases and remain concerned about the cuts to schools, it’s always difficult to pass ballot measures that raise taxes. This difficult situation will likely leave schools with additional uncertainty as 2012-13 district and county office of education budgets are reviewed and adopted over the next six months.