May Revise bumps school funding $3 billion, assumes tax approval

Gov. Jerry Brown proposed Monday to increase the Proposition 98 guarantee by nearly $3 billion above prior estimates, though the funding still hinges on approval of a temporary tax extension by lawmakers in the coming weeks and then by voters in a fall election.

According to the governor's revised May plan, the state's rising revenues have cut the deficit in half and raised the minimum school funding guarantee while allowing for the elimination of a planned $2.1 billion payment deferral.

When asked why he opted to provide schools with a windfall of cash while making cuts elsewhere, Brown said he wanted to begin repayment on state borrowing that includes school payment deferrals and the Proposition 98 maintenance factor.

I think we have to pay our bills," said Brown at a press conference. "This is honest, and there's something infantile about the idea that we spend, and then we borrow.

"Our understanding is the wall of debt has to be brought down," he continued. "My plan does that."

Brown has proposed that the Legislature extend expiring tax measures before the end of the fiscal year and put the question before voters in the fall. The plan still relies on support from two Republican lawmakers in the Assembly and two in the Senate.

To win the GOP's approval, Brown said he would agree with some Republican demands including a spending cap. He did not describe other concessions he was prepared to make, but did say that some sort of pension reform measure would likely make the ballot.

Without ultimate voter approval of taxes, schools would still face a $5 billion reduction under an all-cuts budget scenario, noted the administration.

But note that a suspension of Proposition 98 would require approval from two thirds of the Legislature, and Republicans and some Democrats have said that suspension is not an option.

Meanwhile, the governor's Department of Finance is suggesting that school districts write their budget based on the expectation that voters will approve tax extensions on vehicles, sales, and income.

In the revised budget proposal, the 0.25 income tax surcharge would be implemented in 2012 and last until 2015.

The governor's other two tax proposals - a 1 percent increase on sales and a 0.5 percent increase on vehicle licenses - would continue for five years after June, when they are currently set to expire.

The governor is projecting revenues will be $6.6 billion better than original estimates over the next 13 months, which means that with a $1.2 billion reserve, the remaining shortfall will be about $9.6 billion.

Also included in the plan:

  • Brown would shift the responsibility for providing mental health services, including outâofâhome residential services, from county mental health agencies and county welfare agencies to school districts. This would grow Proposition 98 by approximately $222 million.

  • The permanent repeal of the AB 3632 mandate and removes mental health services from the realignment proposal for counties.

  • The plan would eliminate $2.9 million in federal funding for the California Longitudinal Pupil Achievement Data System pending an ongoing review of the system. Data for federal reporting would be collected and reported by the California Basic Educational Data System.

  • The administration would also eliminate funding for CALTIDES, the teacher database.

  • Charter schools would see an increase of $19.5 billion for the charter school categorical block grant and Economic Impact Aid caseload growth. There would also be $8 million in supplemental categorical funding for new charters.

  • Brown would also eliminate 43 boards, commissions, task forces, offices and departments which he called "an inefficient use of taxpayer dollars," including eliminating the Departments of Mental Health and Alcohol and Drug Programs.

Assembly Republicans, who released a budget proposal late last week that had no new taxes and did not suspend Proposition 98, criticized the May Revision for its reliance on taxes.

"Assembly Republicans showed that we can protect funding for the classroom and law enforcement without raising taxes," said Assembly Republican leader Connie Conway, R-Tulare, in a statement. "We call upon the Governor to stop trying to raise people's taxes and start working across party lines on a no-tax increase budget compromise."

If approved, the governor's proposal would be the highest Proposition 98 funding since 2007-08.

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