State budget: How close is ‘close’?
Analysis from CSBA’s Governmental Relations Department
Published: June 15, 2012
Legislative Democrats believe they are a within a few hundred million dollars of an agreement with Gov. Jerry Brown on the major sticking point—social service cuts—in a $92 billion state budget for 2012-13. With the June 15 deadline for the Legislature to adopt a budget and send it to the governor for a signature imminent, the governor had previously indicated that the Assembly and Senate budget committees on Tuesday didn’t make sufficient cuts. Reports have indicated that the two legislative leaders—Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker John Perez, D-Los Angeles—and the governor have been meeting to try to reach an agreement.
With the passage of Proposition 25 in 2010, a majority vote is all that is required for the Legislature to pass a budget; with a Democratically controlled Legislature, this means a budget can be passed without Republican votes. Republicans boycotted the Senate budget committee hearing today over the failure of their Democratic colleagues to release the specific language associated with the budget 48 hours prior to it being acted on, and they are rumored to be planning to do the same during tomorrow’s Senate floor session.
Prop. 98 funding
Legislative Democrats appear to have come to an agreement on Proposition 98 spending that is in line with what the governor had proposed in May and presumes passage of the governor’s revenues initiative by voters in November. The $53.6 billion proposed for schools is based on the natural growth in Proposition 98 as well as the growth that would come from the governor’s revenue initiative. It is important to note that this increase would not result in any new programmatic funding for districts, as it would primarily pay for the new deferral approved for 2011-12 and reduce the overall amount of deferrals.
The legislative budget proposal includes reducing the amount of school apportionments that are deferred from one fiscal year to the next by $2 billion. This represents $200 million less than the governor had proposed, with those funds being redirected to the restoration of other proposed cuts such as funding for transitional kindergarten and state preschool eligibility.
Trigger reductions
Since the budget is relying on the approval of new revenues, the legislative package will likely include trigger reductions that would fall primarily on schools should voters not look favorably on the governor’s initiative in November, but neither budget committee took action on the issue. The elimination of the deferral buy-down and counting the debt service payments for school facilities bonds in the Proposition 98 guarantee make up most of the estimated $5.5 billion in midyear cuts that districts may face in November.
Additionally, the reduction of the deferral buy-down would increase from $441 to $479 the per-student cut that districts would take if the trigger is pulled, according to the Legislative Analyst’s Office.
Additional provisions include:
- Rejection of the weighted student funding model
- Rejection of the governor’s proposal to make transitional kindergarten optional for districts, meaning there wouldn’t be a change to current law under Senate Bill 1381 (Simitian, 2010), and districts would be required to offer transitional kindergarten to students affected by the change in the kindergarten entrance date. For 2012-13, this means students with birthdays in November would not be eligible to start kindergarten, but would need to be offered access to a transitional kindergarten program.
- Restoration of home-to-school transportation funding under the current provisions of the program, without additional flexibility
- A revised mandate block grant that would be optional for districts, with the ability to seek reimbursement through the traditional claiming process. This would:
- Provide $200 million in the form of a block grant for K-14 mandates the governor had proposed in his May Revisions proposal, as well as many he proposed to suspend and eliminate
- $28 per student would be available for K-12 districts, charter schools and community colleges. County offices of education would receive $28 plus an additional $1 per student.
What now?
Earlier today the Senate Budget Committee took up most of the bills that are needed to implement the budget—the so-called trailer bills. At the close of the committee hearing the chair, Sen. Mark Leno, D-San Francisco, confirmed what we had been hearing: that the budget will be taken up and approved tomorrow, but at least some of the trailer bills, including the one for education, would be delayed a couple of days or more.
CSBA will provide updated information on the expected adoption of the spending plan tomorrow as soon as information is available.