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Governor’s Budget Revisions Offer Election Year Boost to Schools
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Governor’s Budget Revisions Offer Election Year Boost to Schools
Lawsuit Settlement Will Increase Budgets
By Michael Thomas
In his revised May budget proposal, Governor Arnold Schwarzenegger took advantage of unexpected increases in State revenue to make peace with the education community by paying back $2 billion that public educators had argued they were shortchanged. The debate started early in the Governor’s political career. In exchange for suspending Prop 98 funding minimums in the ‘04-’05 fiscal year, he promised school leaders a repayment plan.
His overall plan to put $5 billion more into schools next year �" $3 billion in regular Prop 98 increases and $2 billion to settle the outstanding litigation �" will have a direct impact on local districts. And the move will also settle a firefight that erupted in 2004, with another $2.9 million guaranteed for future years.
State Superintendent of Public Instruction Jack O’Connell and the California Teachers Association had sought restoration of past shortfalls through the courts, attempting to force the Governor to keep his promises.
Barney Finlay, Assistant Superintendent of Business Services for the County Office of Education, estimates that Schwarzenegger’s proposal, if approved by the Legislature, would give schools an additional $295 to $350 per student next year. Overall, an additional $11.9 million could flow to Santa Cruz County schools.
Finlay also said that the State may produce an on-time budget for the first time in years. The constitutional deadline is June 15, but budget battles in recent years have pushed it months past that date.
“All indications are we are going to have something like an on-time budget,” Finlay said. “We haven’t [had an on-time budget] in forever.”
Once the State passes its budget, individual school districts have 45 days to update their finances. For the most part, though, local school boards are preparing for the unusual circumstance of having new, unencumbered funds to allocate.
Even at the Soquel Union Elementary School District, where declining enrollment has offset most revenue increases in recent years, the Governor’s proposal is enough to put some new money in the coffers.
Soquel business chief Sheree Brown said the District will see about $179,000 in new funds.
“That’s taking into account that our enrollment will decline hugely; by more than 100 students,” Brown said.
Most New Money Dedicated to Special Programs
The Governor’s revised budget put a large portion of increased education funding into specific programs such as school counselors, training for the High School Exit Exam, teacher recruitment and improving conditions at low-performing schools.
Brown said that sort of “categorical funding” isn’t what districts wish for.
“When you put a lot of strings on these monies it makes it difficult to use the money,” she added.
She said Soquel schools will qualify for an Art and Music Block Grant. While it will help supplement Packard Foundation and District funding for those programs, “It’s not enough to add a teacher.”
Already, legislative committees have started dismantling portions of Schwarzenegger’s proposal. On May 18, the Senate Budget Subcommittee on Education recommended freeing up much of the categorical monies. They suggested distributing $1 billion to schools to be used as district trustees see fit.
Many school budget chiefs, including Live Oak District’s Steve Romines, are enthused by the prospect of an overall boost in funding next year.
“We are going to get about $640,000 in new ongoing revenue,” Romines said.
The District recently agreed to give all employees a total raise of 3.5 percent. Next year, about $95,000 of the new funding will go towards scheduled “step and column” increases that teachers get based on years of service or new training acquired.
The District and employees will also split the cost of a 24 percent increase in health care costs. The District’s portion, $233,000, will come from increased State funding.
Next year, Live Oak schools must also start putting aside an additional $40,000 per year to cover future benefits for retirees.
“We estimate there is going to be $227,000 left,” Romines said. “That is unrestricted ongoing money. Typically it goes to salary increases, reinstatement of positions or building reserves.”
While the unusual task of deciding uses for unrestricted funds falls to District boards, Romines believes Districts should still play it safe.
“If I had my choice, I would rather build reserves first,” he said.
Two billion dollars of Schwarzenegger’s $5 billion reimbursement plan for school districts will come in the next school year. But the remaining $2.9 billion will reach schools much more slowly, paid out between next year and the 2013-14 school years.
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