NEXT YEAR’S STATE BUDGET DEFICIT THAT COULD BE AS HIGH AS $16 BILLION IS LATEST THREAT TO SCHOOLS, EVEN WITH THE PROMISE OF PROP 30. Tax collections this year nearly $400 million below projections.

By Kimberly Beltran - SI&A Cabinet Report | http://bit.ly/REe0ek

Tuesday, November 13, 2012  ::  School administrators statewide are already making plans to restore positions and programs in the wake of Proposition 30’s landmark passage last week. But around the Capitol, attention has turned to the annual revenue forecast, due from the non-partisan Legislative Analyst this week, that also offers the first hard look at the size of next year’s budget deficit.

Expectations are the shortfall could be as much as $16 billion and with no sign the California economy is set for a strong rebound in 2013, the Brown administration’s commitment to school funding could be tested given the enormous array of competing demands from other public programs for the same source of new revenue.

“I think [Prop. 30 passing] is probably more of a Band-aid than ER gauze and triage,” said Bill Lucia, president and CEO of the non-profit education advocacy group EdVoice. “I think the bigger question is whether there is going to be a commitment [from Brown] to buy down all the deferrals, and where are the state’s priorities – where is the conversation about putting education as the first and most important priority for state resources?”

It is estimated that Prop. 30 will generate at least an additional $6 billion annually – but instead of being set aside just for schools, the money will flow into the general fund and can be used for many purposes.

As part of this year’s budget agreement, Brown and the Legislature agreed to repay $2 billion worth of deferrals owed to K-12 schools if Prop. 30 passed. Also, because of the tax measure an additional $2.7 billion in cuts to K-12 education funding won’t be necessary this year.

Because numerous school districts adopted budgets assuming the November election would deliver a worst case scenario – there’s a sense that many are now in a position to prudently add back some spending. But probably a lot of others were not in good enough fiscal condition to accept a worst-case budget and may still need to trim – just not as much.

San Diego’s Sweetwater Union High School District, for instance, would have had to cut another $30 million from its $350 million annual budget had Proposition 30 failed. To accommodate those cuts, the district – like many others – negotiated with employee groups for instructional day furloughs; 12 in Sweetwater’s case.

Instead, Sweetwater administrators are looking at $11 to $12 million in cuts, to be made up by three teacher furlough days, one management furlough day, a freeze in step raises, changed benefit options and not filling some open positions – all measures agreed to in contract negotiations prior to the election.

“Definitely, we’re not in the clear,” said Manuel Rubio, district spokesman. “We definitely still have our challenges but the passage of Prop. 30 means things will be a lot less strenuous on the overall system.”

Likewise, several Orange County districts were backing off furloughs of between 10 and 15 days this year, needing a reduction of only five to help balance their budgets. Pay cuts of 12.9 percent were also reduced to 6 percent.

Fresno Unified School District superintendent Mike Hanson reported a savings of $29 million – $17.5 million of that new revenue for the district.

He told the Fresno Bee that the money will enable the district to nearly double the number of children attending preschool, offer more middle school elective and career technical education classes, and expand music classes and buy musical instruments for the district. Some of the money will also be used to support transportation and reduce walking distances for middle and high school students, and about $450,000 will go toward increasing the number of Nationally Board Certified teachers from five to about 150.

Instead of cutting $255 million from this year’s budget, and upwards of $650 million next year, the Los Angeles Unified School District, according to the Los Angeles Times, is now looking to restore some of the personnel and programs lost during five years of cuts.

The state’s largest district is also hoping to cancel some of the 10 unpaid furlough days scheduled for this year. The day after the election, the district’s teachers union called for a full restoration of pay for employees and for eliminating all of the furlough days, according to news reports.

Still, there’s reason to wait for this week’s release of the annual revenue forecast from the LAO before making any final decisions.

Architects of this year’s state budget were far more careful in making tax projections this year than last – but so far, income continues to lag expectations by nearly $400 million. Also presenting headwind is the failure of a big payoff tied to the initial public offering of Facebook stock this year as well as continued problems surrounding the closing of local redevelopment agencies.

One major constituent that could also lay claim to Proposition 30 dollars are local government agencies engaged in the governor’s realignment program. County law enforcement officials, in particular, are relieved by the tax measure’s passage given their role in the housing and supervision of lower-level state prison inmates.

Health care and social service programs perhaps hardest hit during the recession will also be in line pushing for new support. There is also the ever growing ‘wall of debt’ that the governor has promised to begin reducing – a big part of that too, is money owed to schools.