Budget Shortfall Triggers $1B In California Midyear Cuts
SACRAMENTO (CBS/AP) — Gov. Jerry Brown on Tuesday ordered $1 billion in midyear cuts to California’s budget that will result in pain for students who rely on school buses to get to class, mothers who depend on child care subsidies to keep working and support programs for the developmentally disabled.
Brown, a Democrat, said that the state’s revenues will fall about $2.2 billion below the $88.4 billion he and state lawmakers had hoped for when they passed the budget last summer.
The announcement was not surprising and could have been worse. The state’s legislative analyst had predicted revenues would fall $3.7 billion below forecast.
Still, the automatic midyear reductions sparked outcry from advocates and invited lawsuits from school districts.
The cuts include up to $100 million each to the University of California, California State University, developmental services and in-home support for seniors and the disabled. Community college fees would increase $10 per unit from $36 to $46, and reductions would be made for child care assistance, library grants and prisons, among other programs.
KCBS’ Doug Sovern Reports:
School advocates warned that an estimated 1 million students— many of them with special needs or from low-income and rural areas — will be affected by the loss of home-to-school transportation funding. In addition, school districts will lose another $79.6 million under the trigger cuts.
“The cut to transportation is absolutely devastating,” said Steve Henderson, a lobbyist for the California School Employees Association, which represents school bus drivers among other school workers. “What that means is a lot of low income and rural kids will not have the ability to get to school.”
Shortly after Brown announced the cuts, which start taking effect Jan. 1, Los Angeles Unified school board voted to sue the state over its $248 million cut to home-to-school transportation funding.
KCBS and Chronicle Insider Phil Matier Comments:
Superintendent John Deasy said at Tuesday’s school board meeting the lawsuit will be filed Wednesday. He called the loss of busing funds “catastrophic” and warned it would leave 35,000 students all over the district and 13,000 special needs students without busing to school.
Advocates estimated that cuts to schools amounts to $55 per student in California and could result in additional layoffs.
Brown and Democrats in the Legislature had hoped for a $4 billion increase in tax revenue through the current fiscal year, which ends June 30. The budget they passed last summer without Republican support was based on a combination of spending cuts, fee hikes and overly optimistic revenue projections.
The governor said that following through on the cuts is a demonstration of California’s fiscal discipline.
“This is not the way we’d like to run California. But we have to live within our means,” he said in a news conference at the state Capitol.
The midyear reduction authorizes districts to cut the school year by up to seven days, but they likely won’t have to cut more than half a day because the funding cuts weren’t as severe as predicted, finance director Ana Matosantos said.
“He proved that there is an adult in the room when it comes to courage to pulling the trigger,” said Kevin Gordon, president of School Innovations and Advocacy, a Sacramento education lobbying firm. “But he found a way to spare schools from the ultimate damage that may have occurred if all the cuts had been implemented.”
Patty Siegel, executive director of the California Child Care Resource & Referral Network, said thousands of working parents will be hit by a new round of child care cuts to save the state $23 million. The state announced it would reduce 7,500 slots for child care assistance on top of 32,000 slots cut last summer.
“When you look at that against the 187,000 fully eligible children on the waiting list for child care, you have a perfect storm for unemployment, for return to welfare, and for a lack of opportunity for children to get the best start they need,” Siegel said.
California currently faces a $3 billion shortfall and is expected to face a $10 billion deficit for 2012-13, resulting in a $13 billion gap over the next 18 months.
Earlier this year, GOP lawmakers opposed Brown’s proposal to place a question on taxes before voters without reforms to the public pension system, regulations and a spending cap. Having failed to broker a compromise with Republicans, the governor said he felt it necessary to introduce his own tax initiative, which he hopes to bring before voters next November.
Brown warned of further cuts when he releases his proposed 2012-13 budget in January unless voters support higher taxes.
Brown said he wants to temporarily increase taxes on the rich, starting with individuals making more than $250,000, and raise the statewide sales tax by half a cent, to 7.75 percent. The proposal would raise about $7 billion a year for five years.
“Going forward, in another three weeks, we will have a number of more cuts, far more than $1 billion,” Brown said. “And they’ll be the same kind of state services, very important to help the poor, elderly, our university students.”
He added, “We don’t have the money so we’ve got to cut back.”
Republicans accused the governor of using the mid-year cuts to his advantage as he pushes his tax proposal. They said they are willing to work with the governor on a budget that protects education.
“Republicans were ready to roll up our sleeves and hammer out a budget solution then, and we are still ready now,” said Sen. Bob Huff, R-Diamond Bar, vice chair of the Senate budget committee.
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