Education Facts

A closer look at state budget spending on K-12 and higher education

Governor's New Tax Plan:  Raises More Tax Revenue, But Still Shortchanges Schools

The Governor's tax initiative specifies that all of the revenue raised by the proposed tax increase shall be directed to schools. However, the initiative goes on to specify that even though the estimated annual $9 billion in increased taxes are sent directly to schools, the taxes shall be counted as "General Fund proceeds of taxes" for purposes of calculating the Proposition 98 minimum guarantee to schools. This is a loophole that will allow the state to reduce its ongoing contribution to schools, while allowing the majority party to fund fast growing non-education programs, such as welfare.

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Has Education Been a Budget Priority?

Everyone hears that education is a priority for California budget drafters, but is it really? A closer look at the 2011-12 and 2012-13 budgets finds that:

  • Despite increasing revenues, schools saw their funding drop year over year in 2011-12 while health and welfare, including newly realigned programs, grew by $3 billion.
  • Education has been the main target of trigger cuts adopted in the 2011-12 budget and proposed in the 2012-13 budget. Education makes up 97% of the program cuts under the 2012-13 trigger cuts, despite the fact that education represents 50 percent of General Fund expenditures.
  • The chart below compares budget funding priorities between the 2011-12 and 2012-13 budget years:

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Is Higher Education a Budget Priority?

Recently at the Capitol, the debate over higher education funding took center stage. It was argued that declining revenues and the rejection of tax increase proposals have resulted in fee increases and funding cuts.

But a closer look at higher education funding shows that cuts to higher education were not a result of a lack of revenue. Higher education cuts actually came down to a question of budget priorities, both in the majority vote budget plan enacted last summer and in the Governor's proposed 2012-13 budget.

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Spending 2012-13

There are many factors contributing to the lack of a positive impact on programmatic school funding, even if the Governor's tax increase succeeds. For starters, his initiative admittedly redirects current school General Fund support to other areas of the state budget. Additionally, the initiative authorizes the calculation of the Proposition 98 minimum guarantee to be manipulated.

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Revenues are Up, But Spending is Higher

In the 2011-12 majority vote budget, 85% of the full trigger cut list targeted school funding, including $1.3 billion in K-14 education cuts and an additional $200 million cut to California's university system. In the end, schools were spared a portion of the cuts in December only because revenues increased by $1.8 billion over the Governor's May Revision projections. However, schools still sustained 65% of the triggered cuts even though school funding was not growing.

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