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Mixed reactions to budget revisions

Posted: May 21, 2008 2:34 a.m.
Updated: July 22, 2008 5:02 a.m.
After educators, parents and teachers urged him to spare education from across-the-board budget cuts, Gov. Arnold Schwarzenegger unveiled a revised budget plan last week, calling for borrowing against future lottery sales in order to maintain minimum funding levels for K-14 education. The announcement of the revised budget coincided with California's "Day of the Teacher."

"The good part about the revise is that the governor is looking to fully fund Proposition 98," said Assemblyman Cameron Smyth. "I am pleased to see that the governor decided to increase funding for public education, ensuring that our schools receive the minimum guarantee under Proposition 98, even in these tough financial times."

California Proposition 98 requires a minimum percentage of the state budget to be spent on K-14 education. Also known as the Classroom Instructional Improvement and Accountability Act, it guarantees an annual increase in education in the California budget.

Members of the Santa Clarita Valley Education Coalition, who coordinated a rally last week in front of Santa Clarita City Hall, anticipated that the proposed cuts would slash approximately $25 million from local schools. This would have significant impacts on local schools, such as increased class sizes, reduced per-student spending and cuts in class offerings at the community college level.

Last week, many were concerned that schools would not be fully funded in light of across the board cuts proposed by Schwarzenegger. Locally, parents and students joined teachers from six local school districts and College of the Canyons outside City Hall on May 13 in response to a Schwarzenegger's initial proposal to slash $4.8 billion in education funding statewide.

However, Schwarzenegger's May Revise, which was released the next day, guaranteed that schools statewide would receive minimum funding levels, as outlined under voter-approved Proposition 98.

The governor's revised budget increases funding to K-14 education over the current year budget by almost $200 million.

To help guarantee funding for schools, Schwarzenegger's revised budget aims to raise $15 billion over the next three years by selling bonds based on anticipated lottery revenue. Approximately $5 billion will be applied to the 2008-2009 fiscal year to lessen the state's deficit, while just under $10 billion will be held in reserve under a "Rainy Day Fund."

Under the plan, Schwarzenegger called for a modernization of the state lottery in order to boost performance and returns on that asset.

If modernized, the state may be able to raise cash up front by selling future lottery revenues.

"I think the private sector can run (the state lottery) better than we can," said Smyth, R-Santa Clarita. "I am concerned however that we continue to rely on stopgap measures, like borrowing against future lottery earnings or a sales tax increase, which amount to nothing more than a band-aid rather than tackle structural deficiencies that will continue to plague our state."

Though the governor's budget revise was presented to the state legislature last week, his proposal regarding modernization of the state lottery requires voter approval on the November ballot, since the lottery was established through the initiative process.

Should voters strike down the proposal, Schwarzenegger will ask legislators to approve a temporary one cent increase in the state sales tax to fund the "Rainy Day Fund" reserve. The tax would be in effect for no more than three years.


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