CTA Backs Governor's Plan, Urges Budget Approval On Time

Revision Limits School Cuts:

Flanked by CTA officers and public safety representatives, Gov. Gray Davis on May 14 unveiled a revised $70.9 billion general fund budget that includes a multi-year solution to a revenue-expenditure gap now pegged at $38.2 billion.

"Because of the state's dire fiscal circumstances, schools have already suffered more than $4.1 billion in cuts. Cutting an additional $1.5 billion will also be very painful. But CTA supports the governor's plan for avoiding across-the-board cuts, fully funding the state's Class Size Reduction Program, and protecting funding for special education and the state's schools of greatest need," said CTA President Wayne Johnson.

Citing a struggling national economy and the economic after-effects of the September 11 terrorist attacks, the governor said that every state, including California, has seen revenue declines. "In these difficult times, there are difficult choices. My choices reflect my values," the governor said. "There is nothing more important to me than education. It is literally the path to a better life for everyone. Schools have made great strides and test scores have improved four years in a row."

The governor told reporters at a mid-day news conference that some of the additional money in his new proposal fully funds the state's most important education reform -- class size reduction. The proposal earmarks $180 million for that purpose.

The governor said the proposal includes state funds to build on recent progress and aims to achieve three goals:

• Continuing the class size reduction reform.
• Keeping teachers on the job and in the classroom.
• And continuing our successful programs of accountability.

Other changes from the governor's January budget proposal address CTA's top priorities: the plan would fully fund Special Education and schools of greatest need.

Of the new school funds in the proposal, $262 million goes for base revenue limits and the projected growth in student enrollment.

On the revenue side, the May Revision's proposed multi-year solution relies on a combination of reductions, a temporary half-cent sales tax, a new higher income tax bracket, tobacco tax increases, and a $10.8 billion deficit bond with a multi-year payback. The proposal also assumes that the state's economic performance will automatically trigger an increase in the Vehicle License Fee, worth about $1.2 billion to the state in the short run and $4 billion annually thereafter.

The revision moves away from a proposal made in January to force 12% across-the-board cuts in categorical programs. The revision replaces them with targeted cuts that aim to protect the most important programs.

Budget Close-up: Some Key Provisions of the Governor's May Revision

The May Revision proposes to:

• Fully fund the Proposition 98 guarantee under Test 2. That would provide $1.5 billion more than was proposed at mid-year after lawmakers passed SB 18X and SB 28X. The proposal would provide $122.3 million above the Test 2 guarantee level in the current 2002-2003 fiscal year.
• Boost growth from 1.00% to 1.34%, an increase of $183.4 million.
• Provide full funding for Special Education, Class Size Reduction, High Priority Program, Accountability, Child Nutrition, and School Safety.
• Restore a $35 million appropriation for Public Employees Retirement System offset to revenue limits.
• Include a deficit factor in budget language, but not fund the 2003-04 Cost-of-Living Adjustment (COLA).
• Not fund $250 million for Equalization that was proposed in the Governor's January Budget.
• Modify the Basic Aid District Excess Tax proposed in the Governor's January Budget and reduce the offset by $20 million. This proposal would provide state categorical funding only to excess tax districts. The plan would also reduce $120 per ADA in basic aid payments. These two reductions amount to a 4.5% cut, comparable to the reductions for non-basic aid districts.

Categorical Program Reductions

The May Revision proposes to make these specific cuts in categorical programs, rather than the formerly proposed across-the-board cuts: A reduction of $350 million from the Base Revenue Limit (or approximately $58 per ADA). The proposal requires districts to replace this funding from their reserves. Other categorical cuts include:

On the downside, the budget proposal still relies on the already completed deferral of the 2003-2004 contribution to the State Teachers' Retirement System at a cost of about $500 million to the pension system.

CTA Members:

Get in touch with your Senator and Assembly Member and urge them to support the governor's May Revision. It does contain painful cuts, but it does the best possible job of protecting core programs and making as many cuts as possible far away from the classroom.