News
Friday, January 25, 2008
The Governor’s Budget
This information was presented by Eric D. Smith, the districts’ interim assistant superintendent of business services, at the January 22 meeting of the board of education.
The governor’s budget represents the first milestone in the development of our districts’ budget. In the wake of a $14.5 billion deficit, the governor is proposing a series of cuts across all programs to close the gap between state revenues and expenditures. The following provides a summary of the key components of the governor’s proposed education budget:
No COLAs/cuts existing revenue limit levels: The governor’s budget estimates that the K-12 statutory cost of living adjustment (COLA) will be at 4.94 percent for the budget year, an increase that would require an additional $2.4 billion. But due to lack of funding under his reduced Proposition 98 guarantee, the governor proposes to provide the COLA across all programs, then apply a 6.99 percent deficit factor that would not only eliminate the COLA, but would reduce current revenue limit levels for both districts and county offices of education on average by 2.4 percent. We estimate that this cut alone will result in a reduction of roughly $2,000,000 in general purpose revenue to the Santa Barbara School Districts.
All major categorical programs reduced: All major categorical education programs will be reduced under the governor’s proposal. The only categorical programs to escape reductions are the QEIA program (Quality Education Investment Act) and the CalWORKS Stage 2 and 3 childcare programs.
All categorical programs will receive a 10.8 percent reduction. However, that 10.8 percent decrease is calculated after adding in the 4.94 percent COLA. After an additional calculation to reduce categorical program growth, the resulting year-over-year reduction to categorical programs will result in a 6.5 percent reduction to state categorical income. Again, all programs are affected including class-size reduction, instructional materials, supplemental instruction, home-to-school transportation, counseling, career technical education and charter schools. We estimate that this cut will result in a $942,379 reduction in restricted revenue for the above purposes.
Special Education: Like other categorical programs, the administration proposes no COLA for special education and applies the same proportional reduction to achieve a total 10.8 percent cut. The governor’s budget summary includes the understatement that: “Schools may have to backfill most of this reduction as the program is federally mandated.” We estimate that this cut will result in a reduction of roughly $410,000 to the districts for these much needed services.
School meal rate reduced: After providing a long-awaited increase in the free and reduced price meal rate just last year, the administration is proposing to take part of last year’s 6 cent meal increase back, by reducing the current 21 cent meal rate by “approximately 2 cents.”
Child Development: The budget includes no COLA or growth for child development/state pre-school programs. The administration opines that, coupled with normal program savings, this action will reduce the number of available slots by 8,000. However, they also state their assumption that “normal attrition” should result in few, if any, currently enrolled children from losing their slot.
Before and After-School Programs: The administration will be proposing a ballot initiative to amend Proposition 49, to allow that program to be reduced proportionally to the 10 percent cut level imposed on all other education programs. The administration also notes that the impact of such a cut should be minimal in this program, as the program has not been fully utilized or implemented since its inception.
What’s next?
In conjunction with his budget release, the governor also issued proclamations declaring a fiscal emergency and
calling a special session of the Legislature. This emergency session is being called to directly deal with the current
year state budget shortfall, estimated to be at least $3.3 billion. Under the provisions of Proposition 58, approved
by Californians in March 2004, the governor has the authority to declare a fiscal emergency if he determines that the
state faces substantial revenue shortfalls or expenditure increases. The governor is then required to call a special
session of the Legislature and to propose legislation to address the fiscal emergency. If the Legislature fails to
approve and send legislation to the governor to address the fiscal emergency within 45 days, it would be prohibited
from acting on any other bills or adjourning in joint recess until such legislation is passed. Once the special legislative
session has been concluded, the district will monitor the state’ budgetary process as well updated information
on the State’ economy to be released at the governor’s May revise to his original budget proposal