Governor Brown releases his 2012-13 budget proposal

1/5/12

Governor Brown released his 2012-13 budget proposal today, four days ahead of the scheduled release and after the Department of Finance mistakenly posted the budget proposal on the website.  In his press conference the Governor briefly outlined a proposal which is dependent on a $7 billion increase in revenues from his proposed tax initiative. This measure temporarily increases the personal income tax on the state’s wealthiest taxpayers and temporarily increases the sales tax by one-half percent.

If passed, the measure would provide additional funding to schools and community colleges. If the measure doesn't pass, the budget proposes $5.4 billion in triggers cuts, including reducing funding for schools and community colleges from the level provided in the budget by approximately $4.8 billion. 

The major budget proposals include:

K-12 Education

• A $2.5 billion increase in the Proposition 98 guarantee for the 2012- 13, an average increase of $700 per ADA, assuming the passage of the Governor's tax proposal.
• No COLA – As would be expected because of the state’s fiscal straightjacket, the Governor provides no cost of living adjustment for 2012-13, which is estimated at 3.17%
• Creating a new funding formula for school by consolidating revenue limit funding and categorical program funding into a single source and distributing these funds based on a weighted student formula. (This excludes federally required programs such as special education)
• Streamlining mandates and creating a block grant program. Receipt of funding from this block grant will be conditioned on schools complying with the mandate provisions.
• Reform for K-14 state mandates.  The Governor proposes eliminating nearly half of the existing mandates and would instead provide $200 million for a new K-12 and Community College “block grant” to cover state mandates
• Complete elimination of funding ($619 million) for home-to-school transportation in 2012-13. In addition, the bus replacement program that helps small school districts buy new school buses will be totally eliminated.

Community Colleges

• An increase of $218.3 million in 2012 13 to partially restore funding that had been previously deferred, contingent upon the passage of the Governor’s tax initiative.
• The Budget proposes to consolidate nearly all categorical programs and provide flexibility to Community Colleges to use the funds for any categorical program purpose.

Other Budget Proposals

• An increase of $37.2 million in federal funds to reflect growth of nutrition programs at schools and other participating agencies.
  
• An increase of $2 million in federal funds for the Fresh Fruit and Vegetable Program, which provides an additional free fresh fruit or vegetable snack to students during the school day.
  
• The proposal would reduce Healthy Families managed care plans by 25.7 percent, impacting access to care for the 875,000 children covered by the program. (The budget proposal would also shift children from Healthy Families to Medi-Cal.)
  What's Next?

Now that the Governor has introduced his budget, the Legislature will begin their analysis of those proposals over the next several months to craft a legislative budget.  

CSEA and the Education Coalition will be reviewing the detail of the budget and the tax proposal to analyze the impact to schools and colleges. 

Technically, the Legislature has until June to present a budget to the Governor however, the Governor is asking for some decision related to cuts to social services and welfare programs to be made as early as March.

At this point, Senate Pro Tem Darrell Steinberg has indicated that he is not interested in making any additional program cuts.

Caution: This report is based on a preliminary analysis of the budget.  Some proposals may change as additional details become available.  We will provide you with additional reports on any new and significant findings.