Budget Package Moves to Governor

LEGISLATURE PASSES REMAINING TRAILER BILLS

Today the Legislature passed the remaining budget trailer bills, including the education trailer bill, and now the budget package moves to the Governor.  After a week of discussions, the Governor and Legislative leaders resolved the remaining outstanding issues and provide a plan that closes the state’s $15.7 billion deficit. The agreement protects education and includes tough ongoing cuts to social service programs.

“We have worked cooperatively and productively with the Governor and our colleagues in the Senate to put forward a budget that reflects the commitment we made in January to eliminate the deficit, protect education and put California’s fiscal house in order by our Constitutional deadline,” said Assembly Speaker John Perez.

The budget continues to fund education programs at the same level as 2011-12, funds home-to-school transportation, rejects the Governor’s proposal to flex all K-12 education funding through a weighted student formula and rejects the consolidation of community college categorical programs.

Here are some key education highlights:

K-12

  • Maintains the current year level of spending for schools, approximately $47.8 billion.
  • No COLA. The actual COLA of 3.24% is not funded.
  • Maintains the funding for Home-to-School Transportation but does not make these funds flexible.
  • Rejects the weighted student formula proposal and maintains revenue limit and categorical funding allocations per existing law.
  • Provides approximately $2 billion to reduce inter-year budgetary deferrals for K-12 schools.
  • Approves $15 million for the Early Mental Health Initiative and shifts administration of the program to the Department of Education.
  • Modifies the Governor’s proposal on education mandates to offer school districts the choice to be funded through the newly established $200 million block grant and receive $28 per pupil or continue to use the current mandate claiming process.

Community Colleges

  • Maintains the base budget, without raising student fees, but provides no new funding proposed for growth, COLA, or for restoration of categorical programs.  
  • Provides no backfill for the estimated student fee revenue shortfall of $100 million in the current year.
  • Provides a backfill, if necessary, to hold CCCs harmless from shortages in property taxes related to the dissolution of Redevelopment Agencies.
  • Rejected the Governor’s language to make changes to the CCC’s funding formula and to provide increased flexibility among categorical programs by consolidating 21 programs into a single block grant.
  • Provides a new mandates block grant, under which districts could opt to either 1) receive $28/FTES and opt out of claims or 2) use the existing claims process.
  • If the tax initiative passes, $159.9 million would buy down cash deferrals and $50 million to fund growth. If the tax initiative fails, no deferral buy down and a trigger cut of $340 million implemented as a workload reduction.

Trigger Cuts if Governor’s Tax Initiative Fails

As we mentioned before, this budget depends on the passage of the Governor’s revenue initiative in November. If it fails, the budget includes a proposed trigger reduction of approximately $5.5 billion for K-14 education.

In order to meet this level of reduction, the education trailer bill authorizes schools to provide a school year of not less than 160 days in fiscal years 2012-13 and 2013-14. Essentially, the budget would allow K-12 districts to reduce the school year by 15 days in each of the next two budget years (on top of the five days already cut in previous budgets) subject to collective bargaining. 

CSEA and the Education Coalition oppose the disproportionate cut to education funding should the Governor’s initiative fail.  This type of action continues the pattern of unfair cuts that have led to employee layoffs, furloughs and devastated services to students since the budget crisis began.

Accordingly, CSEA supports the Governor’s tax initiative which would prevent further cuts to schools and provide approximately $17 billion for education funding over the next four years.

Other Items – Healthy Families

The budget eliminates the Healthy Families Program and transitions all of the children currently covered under that program to the Medi-Cal program.  This transition will impact nearly 900,000 children and will occur in four phases beginning January 1, 2013 and ending December 31, 2013.  The Legislature has built in accountability measures and reporting requirements to make sure that each phase of the transition is concluded before the next transition phase can occur.   This is to mitigate any problems that occur in enrolling children in Medi-Cal and securing medical providers to serve them.  There will also be an education component and a stakeholder process to build awareness of the change and to address any problems early.

What’s Next?

The Governor has until June 30th to sign the budget.  Given that the Governor has worked closely with Legislative leaders on the budget we expect that he will approve the budget by the end of this week.

Caution: This report is based on a preliminary analysis of the budget.  Some proposals may change as additional details become available.  We will provide you with additional reports on any new and significant findings.

If you wish to comment or would like additional information, please contact the CSEA Governmental Relations Office at (800) 867-2026.  Letters can be sent to 1127 11th Street, Suite. 346, Sacramento, CA  95814.

Distribution: Board of Directors; Alternate Area Directors; Chapter Presidents; Chapter Political Action Chairpersons; Chapter Communications Officers, Regional Representatives; Assistant Regional Representatives; Chairpersons and Members, Standing Committees; Political Action Coordinators; Retiree Political Action Coordinators; Regional Communications Officers; Retiree Unit Executive Board; All Staff.

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