Governor's May Budget Revision Buoys Hopes for Education

Gov. Jerry Brown unveiled his May revision of next year's state budget on Monday, saying the recovering economy likely will produce $6.6 billion more in state revenues than once expected, and that K-12 schools will get nearly half of that gain.

On the flip side, his new budget makes clear that public schools will not be spared from state cuts altogether, unless the tax extensions he has so ardently sought are passed.

“We got half the job done, but we’re still looking at a $10 billion structural deficit,” Brown said at a press conference announcing his revised 2011-12 budget of $88.8 billion.

His first budget in January predicted a $26 billion deficit for the year, before the legislature negotiated billions in cuts which, along with higher revenues, whittled the deficit down further.

, sounded relieved and hopeful speaking about the revised budget Monday.

“Although we are still studying what effect the 'May revise' will have on the district, at this point—and I stress at this point—we do not anticipate any cuts,” she said. "At this point we are extremely pleased, but no cuts will most definitely depend on getting the tax extensions."

In the revised plan, K-12 education would get $3 billion more than budgeted in January, or $52.4 billion dollars, because of Proposition 98, a law that directs a minimum percentage of state general fund revenues toward public education.

The state in recent years has often ignored Proposition 98 requirements, citing tough economic times. But Brown said it is time for the state to stop being a “scofflaw.”

He acknowledged, when pressed by reporters, that if he cannot get the agreements he seeks from Republican legislators to extend certain temporary taxes, education could still face $4 billion to $8 billion in cuts.

He's been campaigning for months to extend : a 1 percent hike in the sales tax; a 0.5 percent increase in the vehicle license fee; and a quarter of a percent increase in income taxes.

To date, no Republican legislators have agreed with the extensions, even as all Democrats have backed them.

Stephenson had forecast that the , or $330 a student, after it became evident the tax extensions were not going to go before voters in a June election. She used per student estimates provided by state education officials who warned districts to get ready.

With that potential loss in mind, district staff and school board members have been contemplating increasing class sizes and cutting specialized science instruction at the elementary schools, the seventh period for electives at the middle and high schools, and librarians throughout the school system.

None of these ideas have been popular with parents, teachers, students or officials. At the last school board meeting, more than one board member said they would have a hard time supporting the suggested line item cuts in the budget. (The board instead voted to approve an overall amount for cuts, rather than agreeing to specifics. Board members put off a discussion about specific cuts pending the "May revise.")

Indeed, many in Albany, and around the state, 

Monday, Brown said he’s reducing the amount sought in the tax extensions to $6 billion from $9 billion, and is dropping the income tax extension for a year, in hopes to win some Republican votes.

In exchange, Brown indicated, he is proposing new tax incentives for businesses, including a revised Enterprise Zone tax credit that would give credits for new hires going forward, and a manufacturing equipment purchase tax credit.

His budget plan also calls for eliminating 43 boards and commissions, and cutting about 5,000 state jobs.

Pertaining to local school districts, the governor’s plan also shifts to them the responsibility and costs of operating mental health and substance abuse services that have, until now, been handled by the state.

“It could be a wash,” Stephenson said, of the gain in revenues, considering the gain in costs with these new responsibilities.  

Part of Stephenson’s optimism, she indicated, was that she and other school district superintendents have been called to a meeting with state officials on Thursday about the budget.

“I’m looking forward with great anticipation that that will happen,” she said, partly because the governor hinted in his press conference that talks are moving along.

“The Republicans I’m talking to are providing encouraging words about putting (the tax extensions) on the ballot,” Gov. Brown said. “I’m talking to anyone I think is a plausible vote."

Brown needs two-thirds of the legislature to agree to either pass the tax extenions or to put a ballot about taxes before voters.

But state Superintendent of Public Instruction Tom Torlakson put out a stern warning about the work ahead.

“The May Revision foreshadows the stark choices we face if Republicans and Democrats cannot reach agreement on a long-term solution to the financial emergency in California’s schools,” he said. “The alternative to the governor’s plan is to impose devastating additional cuts that our schools cannot afford—further crowding classrooms, laying off even more teachers, and shortening a school year that is already one of the shortest in the industrialized world.”

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