On Friday, January 8, Governor Arnold Schwarzenegger released his proposed budget. The proposal seeks to address a projected $19.9 billion gap between spending and revenues - a $6.8 shortfall in the remaining months of the 2009-10 budget year and a $12.3 billion gap in fiscal year 2010-11 - without increasing taxes. 

To balance the budget, the Governor proposes to use a combination of "solutions" that rely heavily on spending cuts (43 percent) and efforts by California to secure additional federal dollars. If that effort is not successful, additional cuts would be triggered, as well as some extension of temporary tax increases enacted last year. The independent Legislative Analyst has said that it is unrealistic to expect all of the federal relief in additional funding and flexibility assumed in the budget.

Contrary to the Governor's pledge to protect education in his State of the State speech, the budget proposal actually reduces payments to schools by $2.4 billion over  two years, primarily as a result of manipulations to the way the Proposition 98 base is calculated, through a reduction in General Fund revenue created by a proposed "swap" of gasoline sales tax that must be used for transportation for an excise tax.

The budget also includes deep cuts to health and human service programs vital to the well-being of California's children and families. These programs include drastic changes to the Healthy Families Program, CalWORKs (California Work Opportunity and Responsibility to Kids Program), and Child Care and Development Programs. 

Special Session

On January 8 the Governor also declared a fiscal emergency, per Proposition 58 enacted in 2004, calling a Special Session of the Legislature to consider proposals to deal with the $6.6 billion shortfall in the current year budget. In the Special Session the Governor is calling for the Legislature to begin enacting legislation to implement a number of significant new proposed reforms that are sure to be controversial. The Governor is also calling for measures that would reduce Proposition 98 funding in the current year by $892.6 million. Some of these proposed cuts would do the following.

• Reduce funding for the K-3 Class Size Reduction Program.
• Reduce general purpose funds for school districts and county offices of education.
• Reduce Proposition 98 funding for the Department of Corrections and Rehabilitation Juvenile Justice Division and State Special Schools.
• Reduce categorical funding.

The Legislature has until February 22 to act.

The Governor is also asking the Legislature to place on the June 2010 ballot  proposals similar to failed Proposition 1D and 1E on the May 2009 Special Election ballot. These measures would propose to redirect funds from Proposition 10 of 1998 and Proposition 63 of 2004 earmarked for child development and community mental health programs.

To learn more about the proposed state budget, please see the following websites.

Department of Finance, www.dof.ca.gov

Office of the Legislative Analyst, www.lao.ca.gov

California Budget Project, www.cbp.org

EdSource Report on School Finance 2009-10, www.edsource.org

In the coming weeks, the California State PTA will continue to track legislative developments to provide more information and suggested actions. Stay up to date by checking our website, www.capta.org.

Click here to sign up for Legislative Alerts such as this one.