2011-12 state budget

When Gov. Brown signed the $85.9 billion budget plan for 2011-12, he upheld his commitment to make K-12 funding a priority. While other state programs have taken cuts, the Budget Act seeks to protect education and only proposes cuts in the most dire of situations. It is the Governor's express intent that school districts develop their budgets based on the funds assumed in the state budget.

Revenue projections and trigger cuts
The budget assumes education funding for fiscal year 2011-12 at essentially the same level of funding as the previous year.  It assumes that California will receive an additional $4 billion in revenues for fiscal year 2012, and cash receipts for the big three revenue sources (personal income, corporate and sales taxes) are projected to come in $1.2 billion above the May Revision forecast through the end of June. The Budget Act assumes that this trend will continue and the additional revenues will be realized. If the assumptions fall short, as determined by the Director of the Department of Finance, cuts will be triggered based on how much of the $4 billion the state forecasts will be received.

All cuts would take effect January 1, 2012, except for the school year reductions which districts could impose, subject to collective bargaining, starting Feb 1, 2012. The "trigger" cuts are essentially in three tiers:

Tier 0: If the state gets between $3 billion to $4 billion in new revenues, the state will not impose additional cuts and will roll over any balance of problem into the 2012-13 budget.

Tier 1: If the state gets between $2 billion to $3 billion in new revenues, the state will impose about $600 million of cuts and roll over the remainder into the 2012-13 budget. The $600 million in cuts include a $100 million cut to UC, a $100 million cut to CSU, a $100 million to In-Home Support Services hours and a $23 million across-the-board cut to community colleges triggering a $10 per unit fee increase.

Tier 2: If the state gets $0 to $2 billion in new revenues, the state will impose up to $2 billion in cuts, in proportion to the lower amount, including a $1.5 billion reduction to schools from: (a) cutting seven instructional school days, (b) a $248 million cut to Home-to-School Transportation (except for federally mandated transportation), and (c) a $72 million reduction to Community Colleges.

The Governor and Democratic leaders believe strongly that the revenue targets will be met and that the triggers are unlikely to be pulled. Current revenues are above projections, and if they continue at this rate that target will be met. In the event some reductions are required, the legislature has the ability, through a majority vote, to propose alternative reductions to those identified in the budget. Remember, the prescribed cuts to education would only occur if less than 50 percent of the anticipated revenue is not realized and then the cuts would be proportional to the revenue received.

Trailer Bill Protections
Overall, the provisions in the trailer bill provide greater, not less protection for school employees.

CSEA was aware of the trailer bill provisions and strongly supports two of the three provisions - the intent that school districts budget as if the revenue projections will be met and the suspension of AB 1200 relating to analyzing the budget over three years. The provision stating that school districts should budget based on the revenues in the budget protects classified and other jobs for the budget year. The Governor's office and the Legislative budget staff have stated that they are very confident that the budget projections will hold up. In addition, we are working with them to pass legislation that will bring in revenues and further insure that the projections will be met. The provision regarding evaluation of budgets on the current year, not a three year projection, also provides greater ability to fund current services and jobs. These two provisions work together to save education jobs.

The third provision, suspending the August trigger date for layoff of teachers, is part of the package. It would be inconsistent to say revenue projections will be met, districts can budget based on these figures, but the teacher layoff notice will be reopened as if revenues are not met. The August trigger has seldom been pulled. Classified employees have always been more vulnerable to layoff than teachers. However, the suspension of the August teacher layoff trigger will not have a great impact on mid-year layoffs due to the two provisions outlined above.