A cooling economy is projected to drive down California's revenues by billions of dollars for the coming year. Despite that fact, Gov. Gray Davis last month proposed a revised state budget that would increase K-12 school funding by $341.4 million above his January budget plan. Also in the May Revision of the budget is a one-time appropriation of $540.8 million to help schools offset costs associated with energy increases.
The governor unveiled his revised budget on May 14 during a news conference to which prominent education community representatives, including CTA President Wayne Johnson, were invited.
"The U.S. economy has cooled and California is beginning to feel some of the effects of it," Davis said. "California is no longer enjoying the dividends of a growing stock market. Projections are that revenue from stock options and capital gains decisions will be precipitously below last year and 1999."
The governor said general fund revenue reductions of roughly $5.5 billion are tied to stock market and capital gains downturns. That level of reduction is nearly equivalent to the total amount of the projected two-year shortfall, the governor told reporters.
This year, CTA representatives have been making the case that the budget must provide new funding for the schools of greatest need - those whose students score in the two lowest deciles on the Academic Performance Index or API - as well as the flexibility for such schools to decide how best to use the funds.
In January, Davis chose to provide schools with $1.9 billion above the minimum required by the Constitution. Because of slowing economic conditions, the Constitution would have allowed him to reduce funding for schools in his proposed May Revision. Instead, Davis maintained his commitment and provided schools an additional $53.7 million for 2000-01 and $285.7 million for 2001-02. In addition, he has pledged to fully fund an $860 million Proposition 98 deficiency by the 2002-03 year.
The revised budget would provide a K-12 statutory COLA of 3.87 percent and a 1.40 percent increase to cover enrollment growth during the 2001-02 year. The May Revision would reduce appropriations from the governor's controversial proposal to extend the school year in middle schools. With the savings from the reduced appropriations, Davis is proposing a new grant program that would seek to support some of the state's neediest schools.
This year, it is expected that a significant portion of the budget deliberations will take place in a two-house legislative conference committee that will be charged with crafting a final spending bill for approval by both the Assembly and the Senate. Lawmakers' approval of this version will send the spending plan to the governor.
Len Feldman