Governor's Budget Revision Includes Flat Funding for Schools

The following is from a column called CFO's Corner written by chief financial officer Karen Maloney. Her columns are published occasionally on the district's website, www.nusd.org.

Gov. Jerry Brown released a revised state budget May 14 that provides "flat funding" for K-12 school districts, pays down a portion of the cash deferrals and recommends changes to the proposed Weighted Public Formula along with changes to the Mandated Cost Reimbursement program and effects from the elimination of the redevelopment agencies.

How can this be, one might ponder, as the state budget gap has grown from an estimated $9.2 billion identified in the governor's January proposed budget to an estimated $15.7 billion in the May revision?

The Governor's budget, both the January proposal and the May revision, include significant revenue increases assuming the governor's proposed tax measure passes in November 2012. The governor is proposing a quarter-cent sales tax increase and an increased tax on upper-income earners. If the initiative were approved by voters on the November 2012 ballot, these new taxes would generate $8.5 billion in 2012-13 for the state budget. Education would be funded at the 2011-12 level, and $2.8 billion of cash deferrals would be eliminated.

The important question is, "What will happen to school districts if the voters do not approve the tax initiative?" The unfortunate answer is that school districts' funding would be slashed in January 2013 by $5.5 billion. The payback of the $2.8 billion cash deferrals would not occur and $2.7 billion would be a reduction in programmatic funding for K-14. This is a cut of $405 per student or $12,150 for a classroom of 30 students or one-fifth of an average teacher's salary.

Should the initiative be approved, NUSD's budget projects a shortfall of $5 million without local budget reductions. Should the initiative not be approved in November, NUSD state funding will be cut approximately $3,033,855 in January 2013 or 4.6 percent of the total budget. This would increase the deficit spending to approximately $8 million.

The Department of Finance is stating that the cut to education approximates three weeks of school and districts can negotiate locally to reduce the number of school days. The funding level for NUSD would drop to $4,795 per student or the same level that schools were funded in 2007-08.

The governor's May budget revision is the opportunity for the governor to update the budget based on revised revenue estimates. The next step is for the state Senate and Assembly to put forth proposed budget bills that either support or modify what the governor has proposed.

Come June 30, the legislators will have voted on a state budget that will be the framework for the NUSD 2012-13 budget. The governor will then sign or veto the budget bill with one difference this year. You, the voter, will get to weigh in with your voice, your vote, on the budget bill by either approving or not approving a tax increase.