Summary of Governor's May Revision to the 2010-11 State Budget
Analysis from CSBA's Governmental Relations Department
Published: May 17, 2010
The May Revision, released by Governor Schwarzenegger today, proposes to balance a $19.1 billion General Fund deficit without raising taxes. The deficit is down slightly from $19.9 billion in January, due to a combination of factors. In January, the Governor proposed to partially fill the budget gap with nearly $7 billion of additional federal funding. Because this funding failed to materialize, the May Revision proposes an additional $6.5 billion of spending cuts, compared to the January proposal. These cuts include:
- Elimination of child care programs, except for pre-school and after school care
- Elimination of the California Work Opportunity and Responsibility to Kids Program (CalWORKS)
- Reduced funding for local mental health services by 60 percent
- Reducing state worker pay by 5 percent and increasing employee contributions to retirement by 5 percent
For Proposition 98, the biggest change is a proposed rebenching of the minimum guarantee due to the elimination of state funding for child care. This would result in a reduction of $1.4 billion. The Proposition 98 guarantee has never been increased to accommodate growth in the number of funded child care slots, and CSBA is investigating the legality of reducing the guarantee when funding is eliminated.
Other than the proposed rebenching, the May Revision for school districts and county offices is largely unchanged from the January budget. The changes include:
- Applying $502 million of the current year "over appropriation" toward payment of the $11.2 billion maintenance factor remaining from 2008-09
- Withdrawing the January proposal that the proposed reduction to revenue limit funding be applied to central administration and absorbed by contracting out (the $1.5 billion reduction remains, however)
- Increasing funding to county offices of education by $16.8 million to partially restore the $45 million cut proposed in January, which makes the COE cut proportional to the school district cut
With respect to the January proposals regarding teacher seniority, the May Revision states, "the Governor continues to support...efforts to retain high-quality teachers and principals..."
The continued proposal to reduce revenue limit funding by $1.5 billion, combined with the other cuts proposed in January (notably to K-3 class size reduction), means that total K-12 funding will still be reduced by nearly $2.4 billion, or nearly $400 per student, next year.
Reactions
- Assembly Republican Leader Martin Garrick said the May Revision "makes difficult but necessary decisions."
- Senate Republican Leader Dennis Hollingsworth said, "By wisely not raising taxes, the Governor is siding with the people..."
- Senate President Pro Tem Darrell Steinberg said, "We will not pass a budget that eliminates CalWORKS. Outright. We will not be party to devastating children and families. Period."
This sets up a dynamic that could be dangerous for school funding. If the Republicans and Governor successfully hold the line on raising taxes, and the Democrats successfully hold the line on cuts to CalWORKS and other social programs, then the only solution is to suspend Proposition 98 and reduce K-14 funding.
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