When it comes to the State of California’s budget, it seems education can’t catch a break.
The latest projections from the Legislative Analyst’s Office in Sacramento indicate that successive monthly shortfalls in expected revenues are all but certain to trigger some hefty mandated spending cuts. Millions of dollars would be slashed from schools and public universities, as well as childcare programs and services for the disabled, among other areas.
California’s coffers will be $3.7 billion less than the “anticipated revenue” that lawmakers and the governor assumed in the budget they crafted last summer, said Mac Taylor, the analyst whom legislators look to for nonpartisan financial advice. Reductions were built into the spending plan to kick in if state revenue fell short.
Taylor’s announcement last Wednesday was the first official confirmation that reductions are likely.
The grim news prompted outrage from education officials who already have sharply pared their budgets. But it was no surprise to economists who had criticized Brown for balancing the budget with “anticipated” revenue, and failing to secure any Republican support for the spending plan. State revenues came in $1.5 billion below projections during the first four months (July-October) following the signing into law of Brown’s FY 2011-2012 budget.
Brown has since indicated he wasn’t entirely satisfied with the idea of balancing the budget with anticipated revenue, and said he will hold lawmakers responsible for covering the shortfall. Technically, even after the triggers are pulled, lawmakers have 30 days from the start of the next legislative session on Jan. 2 to either change the triggers or find the extra $3.7 billion in revenue.
Still, analysts aren’t optimistic of the historically dysfunctional legislature pulling off that hat trick. “Short of aliens landing on the planet with a big bucket of cash there’s no way we’re going to make (Brown’s) revenue projections,” Christopher Thornberg, a founder of Beacon Economics, told the Bellingham Herald.
If the economic picture does not improve in December, the triggers would include $1.4-billion in public school cuts that would even mothball state-provided student buses.
But Taylor’s analysis shows little relief in sight. It predicts that even with the new slate of cuts, the state will face a $13-billion shortfall in the next fiscal year. That gap would be so severe it would be difficult to close without going below the minimum funding that state law guarantees for K-12 education.
The cuts will become official Dec. 15 if the projections don’t improve, then be phased in over subsequent months. In September, Brown vetoed a bill that would have allowed the Legislature to reconfigure the cuts, saying it would be reckless to alter them.
Locally, the Mono County Office of Education and both MUSD and Eastern Sierra Unified School districts are putting plans in place. Layoffs aren’t necessarily inevitable, but cuts will likely be, resulting in at least some reductions in services. According to Mono County Office of Education Superintendent Dr. Stacey Adler, last Thursday ESUSD Superintendent Don Clark handed out preemptive pink slips to drivers. If cuts become necessary, ESUSD will start by parking its transportation program.
During last Thursday night’s MUSD Board of Education meeting, Superintendent Rich Boccia and Finance Director Valorie Gale said the district is contemplating some type of downsizing. Currently the district’s Reserve Fund is at about 5.8% of the budget, but that doesn’t include any Measure S funds, since those weren’t a certainty when the 2011-2012 budget was drawn up and approved. The state suggests that Basic Aid districts such as MUSD, which are funded largely by property taxes, maintain a 3% reserve.
This year already saw budget reductions of $921,000, including no summer school, reduced school business leaves and furlough days. Transportation dollars would be among the first to go in the trigger scenarios, and the MUSD has explored both the options of eliminating transportation entirely, and picking up all or most of the state cut $180,000 via the district’s General Fund. Furlough days could also be increased from 5 to the maximum allowed of 7, which would mean an additional $70,000 in savings.
Board Chair Jack Farrell said he thinks it could be “confusing to voters after passing Measure S that we’re now talking about cuts, and also looking at asking them to pass a facilities bond next November.” He pointed out that in Washington, D.C., anything that happens as a result of actions taken by the so-called Congressional Super Committee on Spending and Debt Reduction might not be felt at the state level for another 2 years. “Until then, it’s important to sustain programs that we’ve committed to previously, no matter what the state does,” he summarized.
“If we have the ability [to use the reserves] to absorb at mid-year, it gives us more time to figure out where to cut, ideally as far away from the classroom as possible,” Board member Gloria Vasquez commented. Board member Betty Kittle wasn’t so optimistic. “Look at this year … don’t let the Reserve dwindle away,” she said. “We need to look at serious cuts.”
Boccia was more moderate, reminding the Board that the district’s recent fiscal frugality has led to zeroing out $389,000 in annual deficit spending.
Adler said the county, which is a revenue limit district (as opposed to ESUSD and MUSD, which are Basic Aid and funded largely by property taxes), gets about $562 per student from the state, and would take a 75% hit if the triggers are pulled. The individual school districts would stand to take a 3.75% hit to their funding, including loss of 100% of transportation dollars.
The already precarious district budgeting process is, she said, made harder by the fact that 85% of the budgets are personnel, many under union contracts that can’t be renegotiated. “You can’t put all these ‘what ifs’ in the budget and then change the conditions after all the districts have finalized their budgets,” she commented. “It’s like trying to set up your budget by thinking, ‘I’m going win the lottery in three months.’”
She thinks Mono County could, however, fare better than some of its larger counterparts by virtue of our rural composition. “Cuts will have to be made, but the hope is they’ll be peripheral and not as drastic,” she said. Adler added her frustration with the legislature. “There’s a lot that’s fundamentally wrong with what we’re doing in California … the way things get done is not thought through. Until we get a handle on it, we won’t get education sorted out.”
The potential cuts have led labor groups and many Democrats to call for tax hikes to be placed on the 2012 ballot to stave off more reductions. Both state university systems have said they believe they can absorb their potential cuts, though this year’s austere budget led California trustees to approve a 9 percent fee hike last week (which led to well-publicized student demonstrations.) –Additional source: Bellingham Herald/McClatchy Newspapers