Are the Governor's Education Trigger Cuts Necessary?
Governor Brown's budget assumes the voters will approve a tax increase that could be as high as $9 billion. His budget proposes trigger cuts which would take effect, according to his proposal, if the voters reject higher taxes. Consider that 97% of the trigger cuts are targeting education, 90% of which impact the Proposition 98 minimum guarantee to education,i even though education expenditures only account for about 50% of state General Fund costs. Members from both sides of the aisle have asked the question, "Can trigger cuts be avoided?"Legislative Republicans have put forward a "Budget Roadmap to Protect Classrooms and Taxpayers" which suggests that unpopular trigger cuts are avoidable if there is the political will to put education first.
Summary of Findings:
· Whether or not the Governor's tax increases are rejected by the voters, public schools, colleges and universities will have to budget as if the trigger will be pulled.
· The non-partisan Legislative Analyst's Office says that the Legislature would need $3 billion in alternatives to keep K-14 funding at the same programmatic level as the current fiscal year. The Legislature would need to find an additional $400 million in alternatives to avoid the Governor's proposed trigger cut on the higher education system for a total of $3.4 billion in alternative savings.
· The Republican "Budget Roadmap to Protect Classrooms and Taxpayer" proposal identified $4.4 billion in alternative solutions that, if adopted, would eliminate the need for devastating education trigger cuts. The list includes proposals from the nonpartisan Legislative Analyst's office, viable solutions that have been used in past budgets or reforms to make government more efficient.
The Governor's Proposed Trigger Cuts:
The Governor's 2012-13 January budget proposal includes cuts that will be triggered if the voters reject his proposed tax increase. 97% of the trigger cuts target education, and 90% are from Proposition 98,ii even though education expenditures only account for about 50% of state General Fund costs. The cuts are not contained in the initiative that goes before the voters. The Legislature would have to vote on the trigger cuts for them to become part of the final budget package. The Governor's proposed trigger cuts are:
Ballot Trigger Reductions - Effective January 1, 2013
Expenditure Reductions 2012-13
Proposition 98: $4.8 billion
University of California: $200 million
California State University: $200 million
Courts: $125 million
Department of Forestry and Fire Protection: $15 million
Flood Control: $6.6 million
Fish and Game (Non-Warden Programs): $2.5 million
Fish and Game:(Wardens): $1 million
Park Rangers: $1 million
Park Lifeguards: $1 million
Department of Justice: $1 million
Total Ballot Trigger Reductions: $5.4 billion
How would this $4.8 billion cut impact education?
The Governor's January budget provided $4 billion in increased General Fund spending for Proposition 98.iii Despite this increase in General Fund spending, programmatic funding for schools remains flat year over year.iv This is because the Governor's January budget proposed to use $2.4 billion of the increased funding to reduce the education deferral adopted as part of his 2011-12 budget.v The remaining increase in funding simply backfilled one-time gimmicks used last year. The bottom line is that the Governor's January budget proposal only kept education programmatic funding flat from 2011-12 to 2012-13.
Furthermore, school districts and public colleges and universities are currently planning for next year's budget and are bracing for the worst. Many districts will adopt budgets this spring that assumes the trigger cuts are pulled. They will adopt these reduced budgets before the voters act on the numerous tax increase initiatives currently in circulation simply because they cannot build budgets based on money that may or may not materialize.vi The state's higher education institutions have also indicated that they will budget as if the trigger is pulled. This means that whether or not the Governor's proposed $9 billion tax increase is approved, finding $3 billion in alternative solutions may be the only way to avoid cuts to education.
Governor's Proposition 98 Manipulation Increases Harm to Schools if Taxes Fail
The first part of the Governor's trigger cuts eliminates $1.8 billion reduction of the deferral, which will not result in any impacts in the classroom.vii The real impact of the trigger cut is the Governor's proposal to pay for the costs of education debt service as part of Proposition 98. The nonpartisan Legislative Analyst's Office projects that this manipulation of Proposition 98 along with other reductions will result in programmatic reductions of $3 billion below the level in the 2011-12 budget.viii Not only does this seriously impact classroom funding, but the Legislative Analyst has also raised concerns about the legality of the proposal. ix
In the area of higher education, the Governor's proposed trigger cut represents a real $400 million cut to California's university system.x This trigger cut is on top of the $200 million trigger cut targeting higher education adopted in the 2011-12 majority vote budget. (AB 121, Chapter 41, 2011)
Can Trigger Cuts Be Avoided?
The simple answer is yes. Trigger cuts can also be avoided if the Legislature finds alternative solutions to the proposed cuts. To keep schools at the 2011-12 programmatic funding level, as proposed by the Governor's January budget proposal, the non-partisan Legislative Analyst's office has stated that the Legislature would need to find $3 billion in alternative solutions to the Proposition 98 cuts and $400 million to avoid any higher education trigger cuts.
Republican Alternative to Trigger Cuts Proposed
The Senate and Assembly Republican caucuses recently released a proposal they are calling a "Budget Roadmap to Protect Classrooms and Taxpayers". (A copy of that proposal can be accessed here) The proposal provides $4.4 billion in alternative savings ideas. If any combination of these alternative proposals totaling $3.4 billion were adopted, then schools could avoid the proposed education trigger cuts. Both K-14 schools and the state's university systems could be maintained at the same funding level as proposed in the Governor's January budget. The Republicans used the following categories to identify viable alternatives:
· Hold schools harmless by ensuring legal funding levels - $1.0 billion
· Re-examine past budget solutions: Looking to solutions used in previous budgets - $2.7 billion
· Use one-time windfall to protect classrooms from proposed cuts by dedicating new revenue to schools. (Facebook IPO not scored in proposal) - $0.5 billion
· Streamline government by making existing programs more efficient and halt new programs - $0.2 billion
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