Passing a state budget that assumes voters will pass a tax increase in November is unworkable for school districts, the Legislative Analyst’s Office has concluded. Instead, the nonpartisan LAO is urging the Legislature to pass a series of measures now that would allow districts to plan for a worst case scenario, including eliminating some program mandates, extending deadlines for laying off teachers, and making an even shorter school year optional.
“Although the state and districts continue to struggle with tight budgets, we believe the Legislature can take a number of actions to assist districts in managing their fiscal challenges,” the LAO wrote in presenting its third annual survey of districts and their responses to financial challenges.
In his budget, which he will revise in two weeks, Gov. Jerry Brown proposed that the Legislature build in his $7 billion tax increase – and then mandate $5.4 billion in K-12 cuts, including an approximately $450 per student general revenue cut if it fails. But cutting budgets in the middle of a school year poses substantial contractual and practical problems for districts, which is why 90 percent of districts surveyed by the LAO reported they’re not counting on extra revenues in building their 2012-13 budgets. Many would wait until 2013-14 to include new money if the initiative does pass. (Districts may also be reading tea leaves. The latest poll by the Public Policy Institute of California showed the initiative winning by a bare 54 percent margin.)
In order to soften the impact of budget cuts, the Legislature has given districts latitude to spend 40 categorical programs worth $4.7 billion as they want. Many have used the authority to stop funding adult education, suspend purchases of textbooks and other programs. If they had their way, 80 percent of districts would terminate some earmarked expenditures, including Economic Impact Aid, the chief source of extra money for English learners and poor kids, highly successful Partnership Academies in high school, and the Quality Education Investment Act (QEIA), extra money for some low-achieving schools championed by the California Teachers Association.
Brown is proposing to permanently extend flexibility to nearly all categoricals as well, including class-size reduction, except he’d make that a key component of his finance reform, in which he would end categoricals and redirect the money to districts with English learners and poor children.
The LAO qualifies its support for flexibility and for a phased-in weighted student formula. Concerned that districts might not spend money previously earmarked for disadvantaged students on those children, the LAO recommends either block grants or the adoption of restrictions until new accountability measures are put in place.
Other recommendations of the LAO:
- Reduce the minimum school year from 175 days to 170 days and let districts decide whether to lay off staff or have a shorter year. The state would save $200 million for every day less, the LAO said. The survey revealed that 20 percent of districts have the minimum 175 days, while another 20 percent of districts have cut one to four days off the calendar.
- Eliminate restrictions on contracting out non-instructional services and rules requiring the hiring of substitute teachers based on seniority, at a higher pay scale. The CTA and California Federation of Teachers will fight this proposal.
- Change statutes to move the final date for laying off teachers from May 15 to Aug. 1. This would enable districts to factor in the final state budget in setting staffing levels. The LAO reasons that the change could save teachers’ jobs, since districts would no longer have to lay off more teachers than necessary in May while guessing how much the Legislature will fund K-12 education. (The CTA probably won’t like this idea either.)
About half of the 950 districts surveyed by LAO responded. They included eight of the 10 largest districts and 67 percent of the students in the state. Some of the findings:
- Between 2007-08 and 2010-11, districts cut expenses 6 percent equal to $547 per student in response to budget cuts;
- Districts have eliminated positions for 11 percent of teachers, 14 percent of support personnel such as counselors and 16 percent of administrators (CA already had the nation’s highest student to administrator ratio.)
- While most districts have adopted some furlough days for teachers and staff, only 6 percent eliminated the automatic annual salary raises, based on longevity, for teachers. Health care and benefit costs for districts rose 6 percent during this period.
- Fully a quarter of surveyed districts reported that they cannot handle additional delayed payments from the state – deferrals – without cutting staff or programs, because they no longer can borrow internally or externally, from a county office of education or a bank. Brown has proposed paying down $1.6 billion of the $9.4 billion in deferrals if the tax initiative passes, but possibly adding another multi-billion deferral if the tax plan fails.