News

Wednesday, January 13, 2010

Governor’s proposed 2010-11 budget full of empty promises

 A message from Deputy Superintendent Eric D. Smith

On January 6, 2010 Governor Schwarzenegger released his state of the state address where he pledged to protect public education from another round of devastating budget cuts. Two days later, the governor unveiled his budget plan for fiscal year 2010-11, and nothing could be further from the truth. Citing a decrease in the Proposition 98 minimum guarantee, the governor proposes roughly $2 billion in cuts to public education for the 2010-11 fiscal year. Although it appears that districts will not be faced with mid-year cuts this fiscal year, the governor’s proposal conveniently moves the problem into fiscal year 2010-11.

If the governor’s proposal stands, it is anticipated that revenue limit districts will have their income reduced in the following ways:  

• Deficit Factor. The current revenue limit deficit factor of 18.335 percent for school districts continues. This means that school districts are receiving a little over 81 cents on the dollar for every $100 of general purpose revenue they are entitled to.

• COLA. Unlike last year, the governor proposes to fully “fund” the statutory cost-of-living-adjustment (COLA). Unfortunately, the projected COLA is a negative number (i.e. -0.38 percent) and thus a district’s revenue limit is reduced by that amount under the normal operation of law. We estimate this to be roughly $23 per ADA in the elementary district and roughly $28 per ADA in the secondary district.

• Revenue Limit Reduction. Additionally, the governor proposes an ongoing “targeted cuts” of $1.5 billion, which include $1.2 billion from “school district administrative costs” and recaptured savings of $300 million from the “elimination of barriers to contracting out.”  We estimate this to be an additional $191 per ADA cut to the elementary district and a $231 ADA cut to the secondary district.

Lastly, the governor is proposing a number of what he calls personnel and administrative reforms that target the protections of certificated employees. Among other things, he is proposing that the March 15 deadline for certificated layoff be eliminated and to grant school districts the authority to lay off with 60 days notice from the time the state budget is adopted or amended, to eliminate the use of seniority as a criteria to lay off, assign, reassign, or transfer, and to make substantive changes to the teacher dismissal process.

At this point, it is unclear whether any of the non-financial aspects of the governor’s proposal will gain traction with the legislature. We also do not know exactly how these additional cuts will manifest themselves in our budget as both of our districts move into “basic aid” status.  However, it is clear that the governor’s proposal serves as clarion call, and that in all likelihood, will have to make cuts much deeper than the $5 million figure we originally anticipated.