By Katie Rodman in Santa Barbara News/EdHat | http://bit.ly/pTch3u
updated: Jul 22, 2011, 6:13 AM - Santa Barbara - California State Controller John Chiang met with local education leaders Thursday at Santa Barbara City College to discuss important financial issues in the future of California's education system. The state's K-12 and higher education systems have been taking immense hits lately due to the current forty billion dollar deficit.
Chiang was elected to office in 2006 and reelected in 2010. From the start of his term, he has taken a firm stance on controlling California's budget. He has undertaken many projects such as auditing state programs and has come down hard on officials in Sacramento to ensure that the budget is realistic and low.
According to Chiang, the three top expenditures for the California budget are corrections, education, and healthcare. Cuts are almost impossible to make to the corrections department because it is so underfunded and badly run already, so the burden falls on education and healthcare.
Although California has been running on borrowed money since July 13, 2007, the economy is currently up, and 2012 is projected to be a more fiscally sound year. Chiang stated that he has great hope for this state, and that by taking measures such as re-working the tax code, economical regrowth for California is extremely plausible in the next three to five years.
Chiang insists that little things can make a large difference. He has been working to audit many state programs, such as rebates for medicine. By finding a little extra money here and there, the debt can begin to be paid down. "We are picking up more jobs... We expect more revenue," he stated. Forty billion dollars in excess revenue, however, is unlikely.
In the meantime, the state borrows money from other funds, such as oil spill cleanup. The money is temporarily used where it is needed, often in education, and then must be replaced quickly so that the money will be available for its intended purpose when the time comes.
Chiang attributes much of our current crisis to Prop 13, bad decision making, and an outdated tax code. 1978 Proposition 13 limits property tax to 1% of the full cash value. This initiative severely cut down on tax revenue for the state because property taxes have not been allowed to surpass their 1975 values. Bad decision making aside, an outdated tax code is one thing that today's leaders can focus on to bring about major improvements to our state economy.
What needs to happen with the tax code? Chiang cited expensive ethanol subsidies as an issue that needs to be tackled. Tax credits need to be re-examined to make sure that they are increasing the overall value of the state. Since they go toward research and development, they must be carefully considered and made at maximum efficiency. Chiang stated, "Until we can figure out how to fix our tax struggle... We will continue to struggle."
California is currently ranked last in the nation for higher education. Although California places education above debt services, the education funding is not near enough to compete with funding to other education systems throughout the country. As far as reinstating funding and bringing the higher education system back to its former elevation, the outlook looks grim for the near future. Chiang advised the educational leaders to practice strong communication and gather supporting communities. The state will be in debt for at least 4-5 more years, so the education system will just have to brace itself for the impact.
Chiang did advise young Californians to learn from this sort of scenario. His message: "You're not going to grow unless you have failure." He wants kids to learn from their past mistakes and push on to become better in the end. Let's hope that Sacramento can do the same.