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Governor signs 2012-13 state budget


The Governor signed a balanced state budget that protects education and public safety programs, reduces state spending and closes the state's $15.7 billion deficit for 2012-13. The budget is predicated on voters approving the Schools and Local Public Safety Act this November. If it fails, the budget includes a proposed trigger reduction of approximately $5.5 billion for K-14 education.

While the state continues to face budget pressures, this budget -- with the passage of the revenue initiative -- puts California on its most stable footing in years.

Here are some key education highlights in the budget:

• Maintains the current year level of spending for schools, approximately $47.8 billion.
• No COLA. The actual COLA of 3.24 percent is not funded.
• Maintains the funding for Home-to-School Transportation but does not make these funds flexible.
• Rejects the weighted student formula proposal and maintains revenue limit and categorical funding allocations per existing law.
• Provides approximately $2 billion to reduce inter-year budgetary deferrals for K-12 schools.
• Modifies the Governor's proposal on education mandates to offer school districts the choice to be funded through the newly established $200 million block grant and receive $28 per pupil or continue to use the current mandate claiming process.

Community Colleges
• Maintains the base budget, without raising student fees, but provides no new funding proposed for growth, COLA, or for restoration of categorical programs.
• Provides no backfill for the estimated student fee revenue shortfall of $100 million in the current year.
• Provides a backfill, if necessary, to hold CCCs harmless from shortages in property taxes related to the dissolution of Redevelopment Agencies.
• Rejected the Governor's language to make changes to the CCC's funding formula and to provide increased flexibility among categorical programs by consolidating 21 programs into a single block grant.
• Provides a new mandates block grant, under which districts could opt to either 1) receive $28/FTES and opt out of claims or 2) use the existing claims process.
• If the tax initiative passes, $159.9 million would buy down cash deferrals and $50 million to fund growth. If the tax initiative fails, no deferral buy down and a trigger cut of $340 million implemented as a workload reduction.

Other Items - Healthy Families
The budget eliminates the Healthy Families Program and transitions all of the children currently covered under that program to the Medi-Cal program. This transition will impact nearly 900,000 children and will occur in four phases beginning January 1, 2013 and ending December 31, 2013. The Legislature has built in accountability measures and reporting requirements to make sure that each phase of the transition is concluded before the next transition phase can occur. This is to mitigate any problems that occur in enrolling children in Medi-Cal and securing medical providers to serve them. There will also be an education component and a stakeholder process to build awareness of the change and to address any problems early.

The Governor did use his line item veto authority to trim an additional $195.7 million from the final budget.  While most of the components of the education budget remained intact, the Governor made the following reductions specifically related to education and child care programs:

Early Mental Health Initiative - Eliminates $15 million for the Early Mental Health Initiative program. In his veto message the Governor stated that he appreciated the importance of prevention and early intervention services, but believed that school districts are in the best position to determine whether these services should be funded at the local level.

Child Care and Preschool Education -Reduces child care and preschool programs by $30 million or 8.7 percent across the board. The Governor indicated that this reduction was necessary to help bring ongoing expenditures in line with existing resources.