Polling looks good for Brown

It was a fine weekend for Jerry Brown. He should be elated with the first polling on his revised tax initiative. And the California Teachers Assn., a strong supporter of his first initiative, has come around to back the new version, too, and committed $9 million for the June and November elections. At least a piece of that’s expected to help Brown round up signatures to get the initiative on the ballot, though how much has yet to be disclosed.

Results of the USC Dornsife/Los Angeles Times poll of 1,500 registered voters show that 64 percent of voters back a temporary quarter-cent sales tax and higher income taxes on those making at least $250,000 ­– the compromise that Brown and the California Federation of Teachers agreed to earlier this month in merging their initiatives; 33 percent of those polled opposed it. Democrats were predictably for it (80-16) and Republicans agin (38-61); however, Brown did surprisingly well with independents, three-quarters of whom said they support the initiative, with 23 percent opposed.

Voters were told the money – $7 billion to $9 billion – would go toward public schools, community colleges, services for children and older adults, and local public safety, in line with the new initiative’s title (the School and Local Public Safety Protection Act of 2012) and summary. Brown can claim that because, while the revenue will go to the General Fund, a portion will go to K-12 and community colleges through Proposition 98, while $2 billion will support realignment, in which counties will permanently take responsibility for some social services and prisoners transferred to county jails.

The poll was taken in the days immediately after the deal between Brown and the CFT, but before the teachers union decided to stop collecting signatures for its Millionaires Tax, so pollsters asked about that one, too. CFT proposed a permanent, higher tax, though only for millionaires.

CFT’s initiative outpolled the hybrid tax plan 69-27, 5 percentage points higher. But business lobbies had already come out against CFT’s plan and may have waged war against it, so Brown’s tradeoff – sticking with a small sales tax and lowering the rates on the wealthy – could prove smart if business groups end up sitting on their hands.

“Jerry Brown may have pulled off a coup. By convincing the teachers to drop their initiative, he ends up with a compromise that still draws big levels of support,” Dan Schnur, director of the USC Dornsife/Los Angeles Times Poll, said in a statement.

The strong poll results on the initiative would appear to contradict Californians’ ambivalence about paying any new taxes. Asked whether the state’s $9 billion deficit should be resolved through a combination of taxes and cuts, as Brown proposed, or just cuts, 49 percent said do both taxes and cuts, while 45 percent said cuts alone. Apparently, respondents feel OK about taxes as long as they’re not getting the bill. (A full 80 percent also favor a $1 a pack tax increase on cigarettes, which is on the June ballot.)

That sentiment is reflected in the apparent opposition to the other tax proposal that may be on the November ballot, proposed by civil rights attorney Molly Munger and backed by the state PTA. It would provide $11 billion to K-12 and early childhood education by increasing the income tax across the board, though most families earning less than $50,000 would pay a negligible increase. It polls the mirror image of Brown’s new tax, with 32 percent in favor, 64 percent against. (Munger and the PTA face the challenge of explaining to voters that the increase will apply to their net incomes, after deductions, not to their gross incomes.)

The  endorsement of Brown’s merged initiative by CTA’s State Council of 800 delegates was expected, but critical nonetheless.

In a statement, CTA President Dean Vogel called the revised plan “a responsible and progressive plan that requires the wealthy pay their fair share in order to close the state budget deficit, restore funding to schools, colleges and essential public services and put California on the road to recovery.” He promised to work “with other labor unions and community groups to quickly qualify this initiative for the November ballot.” That implies that CTA will fork over some of the $4 million to $5 million it will take to get 1.2 million signatures by mid-May.

The State Council will meet again in June, at which point it could agree to additional spending on the November election.

Community colleges hurt by CSU freeze

President Obama has called community colleges “the unsung heroes of America’s education system.” U.S. Education Secretary Arne Duncan said, “no other system of higher education in the world does so much to provide access and second-chance opportunities as our community colleges.” Yet community colleges can’t catch a break.

Two days after California State University announced unprecedented curbs in enrollment, including closing down applications for the spring 2013 semester and possibly wait-listing all freshmen applicants for the following fall, the state’s community colleges are assessing the damage.

“It’s a double whammy,” said Michele Siqueiros, executive director of the Campaign for College Opportunity in Los Angeles. “Students can’t get the courses they need to transfer and when they do, the doors are being shut.”

The Community College Chancellor’s office estimates that several hundred thousand students have been turned away in recent years because $800 million in budget cuts since 2008-09 has forced the schools to eliminate thousands of classes.  Closing off spring admission will knock out another 16,000 or more, mostly community college transfer students.

“If the students can’t get in in the spring, it simply means they’re with us longer,” said Brian Murphy, president of De Anza Community College in Cupertino. “I think for a lot of them, the notion is I’ll complete more units and reapply.”

Annual number of community college transfers to CSU, UC, In-state private and out-of-state private four year colleges.  (Source:  CA Community College Chancellor's office). Click to enlarge.
Annual number of community college transfers to CSU, UC, in-state private, and out-of-state private four-year colleges. (Source: CA Community College Chancellor's office). Click to enlarge.

De Anza has one of the highest transfer rates to UC and CSU of all the community colleges. It sent more than 1,400 students to Cal State schools last year. Statewide, the number is close to 57,000 transfers. If those students can’t move on, they either leave school halfway to their goals or stay in community college and wait, because the process of getting into CSU as a current community college student is easier than as a former student.

That will put those already hard-to-get classes even further out of reach as students who normally would have moved on remain in community college, taking up seats that should be going to new students. That creates a backup in the cycle of the system, explained Rich Copenhagen, a member of the Student Senate for California Community Colleges. “We’re very concerned that this will make students not pursue higher education at community colleges because they’ll be less likely to transfer, which will have an impact on the future of the state.”

Ever since the Cal State announcement, Copenhagen said his classmates in the Peralta Community College District have been contacting him. Copenhagen says students are worried. “The amount of concern I’m getting is unusual,” he said, but attributes it to how close to home this hits. “People don’t tend to identify with the cuts until it directly affects them. A lot of people aspire to transfer to CSU, so when CSU proposes cutting transfers it raises a lot of red flags.”

Impacted wisdom

The only exceptions are students in one of the majors established through SB 1440, the Student Transfer Reform Act of 2010, that created a seamless and guaranteed transfer pathway from community college to Cal State. Since it’s so new, just a few hundred students are affected. But even their choices are limited.

Of the 23 campuses in the CSU system, only eight are available for SB 1440 students: Channel Islands, Chico, East Bay, Fullerton, Los Angeles, San Bernardino, San Francisco, and Sonoma. The Chancellor’s Office is trying to spread the load so no one campus is overwhelmed. There’s no guarantee that students will be admitted to the campus closest to where they live, however, even though community college students tend to have ties to their local communities.

“They are disproportionately students of color, and what we know about students of color is that they’re more likely to have family relationships that require them to stay at home,” said Scott Lay, president and CEO of the Community College League of California. And that, said Lay, gets into important economic and social justice issues.

A number of Cal State colleges are on the verge of, or are already affected for regular admissions, meaning they have reached their enrollment limits in some or all majors. Once that happens, the campus can raise admission requirements.

Fullerton, San Diego, and San Luis Obispo are over-enrolled in every major and this week, San Jose State is holding required public hearings before announcing their designation. That troubles De Anza’s Murphy. He said about 60 percent of his transfer students go to San Jose State, and nearly three-quarters of his students have full-time jobs.

“Being told that there’s a spot for you in Southern California is what we might call an illusory admission,” said Murphy. “The number of working-class students who can disrupt their entire lives to go to another part of the state is an admission without meaning.”

These barriers are butting up against efforts to increase college completion rates in California and nationwide. CSU’s Graduation Initiative seeks to increase its graduation rate by 8 percent by 2015-16. The Student Success Task Force just spent a year studying the best ways to boost community college completion at the behest of the Legislature. Yet many of those same lawmakers continue to approve budgets with hundreds of millions in higher education cuts.

“There can be lots of pious talk about completion rates and graduation rates,” said Murphy, “but none of it has the ability to trump the cutbacks in recent years.”

Big price, little time for initiative

The California Federation of Teachers has stopped collecting signatures for its Millionaires Tax, throwing its full effort into an expensive race against time to qualify an initiative it negotiated last week with Gov. Jerry Brown.

The union had vowed to continue its own initiative drive as a backup in case the compromise effort with the governor was flagging. But there was always a question whether the CFT, slightly more than a third the size of the California Teachers Association, had the heft to succeed with one initiative, let alone two.

The new Brown/CFT initiative promises to be one of the most expensive, if not the most expensive, state signature drives. It has about seven weeks to collect around 1.2 million signatures: the minimum 805,000 signatures to qualify an initiative that includes a constitutional amendment, plus a cushion of 300,000 to 400,000 signatures. The compressed time frame has driven up the market price to $4 per signature for the new initiative – twice the $2 per name for other initiatives. And, come close to early May, that price may rise some more. That’s at least $4.5 million to $5 million to qualify the new initiative for November.

Jeffrey Freitas, CFT secretary/treasurer, told me that the campaign has promises for the money, and he’s confident it will come in. The CFT will put in at least “a couple million,” and other unions and grassroots organizations in its partner, the Courage Campaign, will deliver, too.

This week, signature collectors hit the street. With friends in high places, Brown was able to get Attorney General Kamala Harris’s office, his old shop, to approve the revised title and summary on the new initiative in three days, instead of a month or longer, in effect giving Brown three more weeks to gather signatures before the practical deadline to submit names to county election officials in early May. (The record, I’m told, is the 33 or so days it took to qualify Indian gaming on the ballot in 1998.)

This weekend could be critical. The CTA’s State Council, its 745-delegate decision-making body, will have its quarterly meeting in Los Angeles. It’s expected to decide how much money to spend for November, and how to spend it. The CTA, a key ally of Brown, couldn’t be happy that its junior brethren at the CFT have upped the price for initiatives. Since Brown at this point is still collecting signatures on his original initiative, the CTA faces the prospect of splitting and increasing its contributions. It and other unions are already facing another potentially costly battle against a “paycheck protection” initiative that would deny public unions the right to deduct members’ dues for political purposes.

Brown’s initiative called for a four- to five-year temporary tax, raising the sales tax a half percentage point and the income tax on individuals earning more than $250,000. The money, between $5 billion and $7 billion, would have gone to the General Fund. The CFT’s Millionaires Tax would have been a permanent tax increase, raising the income tax on those earning $1 million by 3 percentage points, and 5 percentage points on those earning more than $2 million. The money, between $7 billion and $9 billion, would have gone into a trust fund, with 40 percent committed to higher education.

The merged initiative calls for only a quarter percentage point increase in the sales tax for four years and a seven-year increase in the income tax on individuals earning more than $250,000. The rate increases for millionaires would be higher than Brown called for but less than the CFT proposed. The money would go to the General Fund, which faces as much as a $9 billion deficit.

The California Business Roundtable and the California Chamber of Commerce earlier this month came out against the CFT initiative but withheld support for Brown’s. What happens next is a matter of great speculation. Brown will need business backing, particularly if there is well-funded opposition to the new initiative. Occidental Petroleum and Kaiser Permanente are among companies that contributed to Brown’s original initiative, and Brown told the Sacramento Bee Tuesday that Occidental remains on board.

Loren Kaye, president of the California Foundation for Commerce and Education, which is affiliated with the California Chamber of Commerce, said that the Chamber remains concerned about the initiative’s impact on the business climate but had not yet begun talks with Brown. Robert Lapsley, president of the Business Roundtable, said that the organization’s board would not take up initiatives again until June at the earliest. It was unalterably opposed to the permanent tax increase proposed by the CFT; the seven-year increase will be looked at, he said, but the board had made clear that it would consider the larger context of the need for pension reform and other legislative actions to improve job creation.

Three-way overtures with Molly Munger

Meanwhile, lest she be forgotten, civil rights attorney Molly Munger launched  a 30-second TV ad in Los Angeles and San Francisco this week promoting the other tax initiative heading for November. Her Our Children, Our Future plan would raise $10 billion for early education and K-12 schools through an increase in the graduated income tax for 12 years – a “shared sacrifice, shared benefit,” in the words of campaign manager Addisu Demissie.

The ad makes the case for education funding and promotes a calculator that enables viewers to see how much money would go to their local school through the initiative.

The initiative is backed by the California State PTA, which has more than 1,000 volunteers in the field collecting signatures, according to Demissie. Because it would require a statutory change, not  a constitutional amendment, the initiative needs 300,000 fewer signatures than the governor’s to qualify.

The TV ad is not a response to those calling for the campaign to give way to Brown’s initiative, Demissie said. “It’s targeting folks receptive to our message to let them know there is reform on the ballot in November that will send money directly to schools.”

Brown would like Munger to drop her initiative, but hasn’t met with her. However, he told the Los Angeles Times he did briefly speak with her for the first time last week and that his wife, Anne, had an email exchange with Munger. “She sent my wife a nice email and my wife responded,” the governor told reporters. “And then she responded back. So that’s where we are. But we do have two incompatible initiatives.”

Brown, CFT cut deal for November

Now there are two.

Gov. Jerry Brown is halfway to having only one tax initiative on the November ballot, now that a coalition led by the California Federation of Teachers has agreed to merge its proposed tax with Brown’s in a deal that will raise more money from the wealthiest 1 percent for a longer period – with a portion of the extra money likely going to  the state’s community colleges and universities.

The agreement, announced Wednesday, leaves civil rights attorney Molly Munger’s $10 billion income tax initiative, devoted primarily  to early childhood education and K-12 schools, as the remaining potential competitor on the ballot. A spokesman for Munger’s Our Children, Our Future initiative insisted that the effort to collect signatures to qualify for the ballot would continue, but there will be renewed pressure on her and her ally, the state PTA, to halt the campaign or on Brown to reach an accommodation with them. Key business groups – the California Chamber of Commerce and the Business Roundtable – have already come out in opposition to Our Children, Our Future, while not yet endorsing Brown’s plan. (Business will wait to see if the Legislature passes pension reform, its top priority.)

In grafting the CFT and the Courage Campaign’s Millionaire’s Tax of 2012 onto Brown’s Schools & Local Public Safety Act, the text of the governor’s initiative will remain the same; only four numbers will change. Brown agreed to:

  • Halve the sales tax increase from ½ to ¼ percent, reducing a regressive tax on the poor and middle class. It will run four years, starting Jan. 1;
  • Leave  the income tax increase on joint filers earning $500,000 at 1 percent, but raise the tax on joint filers earning $600,000 by 2 percentage points instead of 1.5 percentage points, and the tax on millionaires by 3 percentage points instead of 2 percentage points;
  • Extend the income tax to seven years, instead of only five years.

Brown had projected that his tax would raise as much as $6.9 billion per year, but the Legislative Analyst said that might be as much as $2 billion too high; the Department of Finance is saying the new initiative could raise between $7.1 billion and $9 billion, an additional $2 billion.

The CFT’s initiative had promised that 40 percent of its tax would be divided equally among community colleges, CSU, and UC, with 20 percent committed to K-12 schools and the rest toward social services and public safety. There’s no explicit commitment to higher education in the governor’s initiative, which would divert a portion of revenues from the sales tax and vehicle license fees to pay for public safety and some social services now the responsibility of counties and local communities. The rest would shore up the General Fund. But the CFT is expected to press for additional money for higher ed through the budget process – and call in its UOMEs.

It will take a massive effort to collect more than 1 million signatures by early May to qualify the revised initiative  for the November ballot. For insurance, Brown will also continue collecting signatures for his current initiative, in case the new one comes up short.

CFT’s initiative had outpolled the governor’s initiative, with 63 percent support vs 58 percent, in a Field Poll last month; Munger’s got slightly under 50 percent. But the CFT, the smaller of the two teachers unions, didn’t have a lot of money to wage a protracted campaign, especially if business interests were to throw money to defeat it. It also didn’t want to be blamed if a confused electorate defeated all of the competing initiatives.

But Brown, too, had reason to compromise. In a Public Policy Institute of California poll this month, the governor’s initiative drew only 52 percent support, down from 68 and 62 percent support in two earlier polls.

Recently, there was an escalation of words between Brown and the CFT after the governor called for the union and Munger to abandon their initiatives.

“It’s not going to happen,” CFT President Joshua Pechthalt said at a news conference last week. He vowed that the union was poised to spend another $1 million for its signature drive.

Earlier this year, Brown had paid a personal visit to Pechthalt’s home in Los Angeles to try to persuade the union to give up. He told the Sacramento Bee editorial board that he lingered to help Pechthalt’s 12-year-old daughter with a school assignment.

In the long run, it worked – a reminder to Brown how important it is to do your homework – or at least someone else’s.

Charters choose Brown’s tax plan

Charter schools and the state’s largest teachers union rarely find anything to agree about. But the California Charter Schools Assn. is now the second major education group, next to the California Teachers Assn., to endorse Gov. Jerry Brown’s $7 billion tax initiative. The 13-member board of CCSA, representing most of the 982 charter schools in the state, voted unanimously to support it last week, said Jed Wallace, CEO of the charter schools association.

Brown has been leaning on political leaders to exclusively back his tax plan in order to put the squeeze on sponsors of two competing tax initiatives gathering signatures and make them drop out. But Brown didn’t call him, and he didn’t need to, said Wallace. “The governor’s is the one initiative that attempts to put the states’ broader fiscal house in order while providing some resources to education,” he said Sunday.

Then there’s the not insignificant factor that charter schools know they can count on the support of Brown, who started two charter schools in Oakland. The other two competing initiatives – “Our Children, Our Future,” sponsored by the PTA and wealthy civil rights attorney Molly Munger, and the Millionaires Tax of 2012, by the CTA’s little sibling, the California Federation of Teachers, with backing by the California Nurses Assn. – would dedicate more money for schools. Brown’s half-cent sales tax increase and quarter of 1 percent increase in the graduated income tax would produce money for the General Fund, with about 40 percent going to community colleges and K-12 schools through Propositon 98. But, through a weighted student formula, Brown is also proposing to make funding more equitable and simpler, a long-sought goal of charter schools.

A recent report by the Legislative Analyst’s Office calculated that charters receive on average $395, or 7 percent less funding per student than district schools, and that doesn’t take into consideration extra facilities costs that many charters face. Most of the difference is in smaller categorical grants, and the difference is larger for new charters. Nearly all categorical funds would gradually disappear under a weighted formula, to be redistributed to districts based on the number and concentration of low-income and English-learning students they serve.

At a forum last week at CCSA’s annual convention, State Board of Education President Michael Kirst estimated that nearly all charter schools would fare better under Brown’s formula. Also last week, Brown attended a rally for charter funding equity at the state Capitol.

Brown is proposing to raise the sales tax by a half cent for four years and the income tax on those earning more than $250,000 for five years. Brown would commit most of the education money to pay down $10 billion in deferrals, money owed to schools that the state pays in the next fiscal year. Deferrals have especially affected charters, many of which have to borrow the money owed by the state at higher short-term interest rates than district schools pay.

Nearly all charter schools are nonprofit organizations, with restrictions on involvement in political elections. But they can provide information to parents on the impact of the various initiatives on their schools, Wallace said.

Neither the California School Boards Association nor the Association of California School Administrators has yet taken a position on which initiative to support. Of the other members of the Education Coalition, the teachers unions are split, and the state PTA is backing Munger’s $10 billion increase in the income tax.

PTA is mobilizing for $10 billion fundraiser: Our Children, Our Future

In towns and cities throughout California, something quite remarkable is happening. Parents and family members are organizing for the largest PTA fundraiser ever.

They are not selling gift wrap or candy or washing cars. They are organizing to support the Our Children, Our Future education initiative for the November ballot. This measure will raise $10 billion to $11 billion each year to restore education programs and services their children desperately need now. Critical funding would be provided on a per-student basis to every school site in the state. That’s every student, every school.

In the coming weeks, if your neighbor or friend or a parent from your local school comes up to you and asks “Will you sign our petition to support funding for our schools?” it is likely to be a PTA volunteer speaking up for children.

The stakes are high. According to State Superintendent of Schools Tom Torlakson: “The deep cuts made to school funding – and looming uncertainties about the future – are driving school districts to the brink of insolvency. Plain and simple, our schools need new revenues to get back on solid financial ground.”

During the past several weeks, the PTA has helped train parents to get beyond mad and get organized. From San Diego to Orange County to the Bay Area to Sacramento and many points in between, PTA volunteers now have petitions in hand and are seeking signatures to support the Our Children, Our Future education initiative.

Why? Because parents have been seeing something really scary happening in California.

Per-pupil funding in California is 47th in the nation, lagging behind the national average by $2,580 – more than at any time in the past 40 years. Our state ranks dead last in class sizes – 50th out of 50 states – with the largest class sizes in the nation.

An entire generation of children is being denied the education they need to succeed in the workforce and succeed in life. On behalf of all these children, California State PTA decided we couldn’t wait any longer for the political experts in Sacramento to come up with a plan that truly puts children first.

Instead, we decided to help write the plan – the Our Children, Our Future education initiative – to make sure California is serving its most important constituency: our children and youth.

Working with the nonprofit Advancement Project, the PTA is supporting this initiative because it will start to restore – right now – the programs and services that have been cut out of our local schools.

As I travel the state, I see parents and the public embracing this initiative. The more they learn about it, the more they like the approach because they’re tired of fighting  just to prevent deeper budget cuts. They want to take positive action to raise additional funding that will transform their local schools.

The initiative proposes to generate this new funding through a progressive, sliding-scale income tax increase that asks the wealthiest citizens to contribute the most. But Our Children, Our Future is not merely a “tax initiative” in the way that other proposals are. It is a bolder effort to begin reversing years of chronic underfunding and to truly transform our public schools.

Parents want their children to have a complete education – not shorter instructional time and larger classes, not the elimination of the arts and librarians, not schools that fail to provide counselors and physical education.

The PTA plan is pretty simple and easy to understand:

  • Raise $10 billion to $11 billion dollars each year and put it in a trust fund;
  • Target money for early childhood education and educational programs and services for K-12 schools;
  • Send the money to every local school on a per-pupil basis;
  • Give parents and the school community input on how the money is spent;
  • Provide a clear list of what the money can be used for;
  • Give the voters a chance to see how it works, and let them decide if they would like it to continue after 12 years.

This approach is significantly different from any other ballot option.

It is the only initiative that targets money exclusively for early childhood education and K-12 schools. In each of the first four years, it also pays education bond debt-service costs for pre-kindergarten through university school facilities. (Payment of the bond debt-service costs starting in its first full fiscal year will provide the state General Fund savings of approximately $3 billion per year.)

If I were writing a movie script the plot might be:

“Can PTA moms and dads out-hustle professional organizers and politicians in a campaign about the future of their children?”

We are committed to making this a story of triumph because that’s what this is all about –  our children and our future.

Carol Kocivar of San Francisco is president of the California State PTA. The California State PTA has nearly 1 million members volunteering on behalf of public schools, children, and families. The PTA also advocates at national, state, and local levels for education and family issues. For information: www.capta.org. You can find more information about the Our Children, Our Future initiative at www.ourchildrenourfuture2012.com

Financially strained districts on rise

Nearly a third of California students attend school in a district facing dire financial circumstances. A report released yesterday by the State Department of Education shows that 127 of California’s 1,037 school districts are now designated as either in negative or qualified budget territory. And that’s before taking the January trigger cuts into account.

2011-12 California school districts in financial distress. (Source: Calif. Dept. of Education). Click to enlarge.
2011-12 California school districts in financial distress. (Source: Calif. Dept. of Education). Click to enlarge.

Seven districts in the First Interim Status Report for 2011-12 received a negative certification, meaning they might not have enough money to get through the rest of this academic year or the next one. They include Vallejo City Unified, which was on the verge of bankruptcy in 2004 and is still paying off a $60 million bailout loan from the state.

Another 120 districts – 17 more than last year – landed in qualified status. They range from Los Angeles Unified, the largest district in the state, to La Grange Elementary School District in rural Stanislaus county, with 7 students. These districts will get through this year, but may not be able to pay their bills in the next two years.

“The financial emergency facing our schools remains both wide and deep,” said State Superintendent of Public Instruction Tom Torlakson in a written statement. “The deep cuts made to school funding – and looming uncertainties about the future – are driving school districts to the brink of insolvency.”

For a second straight year school districts are planning their budgets without knowing whether they’ll have to take another mid-year cut. If voters reject all of the tax increase measures on the November ballot, funding will fall by about $450 per student next year. In the meantime, the March 15 deadline for preliminary layoff notices to teachers is three weeks away.

“I don’t think this list accurately reflects how serious the situation is,” said Michael Hulsizer, head of governmental affairs for the Kern County Office of Education. “Imagine one of these districts facing a $450 per student cut on top of where they are; they have no place to go other than to make cuts right now.”

That’s what Superintendent Kent Taylor is working on in Southern Kern Unified School District. A year ago the district was on the negative list, facing insolvency. This year, after renegotiating all its vendor contracts and getting the unions to accept some furlough days and reduced medical coverage, the district has moved into the positive zone. Taylor intends to keep it there, and that means getting into the weeds himself, looking for any place to save money.

2010-11 California School Districts in financial distress.  (Source: Calif. Dept. of Education) Click to enlarge.
2010-11 California School Districts in financial distress. (Source: Calif. Dept. of Education) Click to enlarge.

“Superintendents nowadays, if they want their districts to survive, have to spend a lot of time on business. Half my day is spent on finances, and that’s how we’re going to stay strategically planned for the future.”

Even the best plans can’t compete with the recession. In San Bernardino County, where the unemployment rate is nearly 12 percent, a quarter of the school districts are on the qualified list. Riverside County, with 12.5 percent unemployment, has 40 percent of its districts in qualified status. But it’s the school districts around the state capital that are reeling the most. More than 95 percent of students in Sacramento County attend one of the eight school districts that ended up with qualified certification.

It falls to the county offices of education to monitor the districts and try to help them get back on sound footing. “I send them a letter which gives them the steps we think they need to take,” explained Dave Gordon, superintendent of the County Office of Education. “Our role of fiscal oversight is not to tell them what to cut; our role is to tell them what it will take to maintain their solvency.”

One of the most dramatic downturns in the county is in Elk Grove Unified, where Gordon spent nearly a decade as superintendent. During his tenure, Elk Grove was one of the fastest growing districts in the state; they couldn’t build schools fast enough. Since then, the housing market tanked, growth stopped, the district’s enrollment fell, and, of course, the state made huge cuts in education.

Gordon said one of the biggest problems is the state deferrals that push billions of dollars in Proposition 98 funding into the following fiscal year. The state shortfall gets erased that way, but districts are left scrambling for cash to cover their expenses, and as they run out of reserves they turn to loans, often with high interest rates.

That’s why there’s so much riding on the governor’s tax initiative. Gov. Brown said the first thing he’d do with the additional funds for education would be to start to pay down the deferrals.

County offices are advising districts to again prepare for the worst, but “worse is a matter of degree nowadays,” said Gordon. “It’s all a question of how much you’re willing to prepare for the sort of doomsday cuts. What we keep saying to people is that hope is not a strategy.”

Bus money back for next year, too

Days after signing a bill restoring $248 million in school bus funding for the rest of this year, Gov. Brown has done an about-face and also agreed not to eliminate school bus funding in next year’s budget. Instead of cutting other parts of the K-12 budget to make room for $500 million in home-to-school transportation, Brown has chosen to commit some of the new taxes that he’s asking voters to approve in November for that purpose.

Brown had intended to use $2.5 billion in new revenue from temporarily raising the sales and income taxes to eliminate some of the state’s late payments to districts, IOUs known as deferrals. Instead, only $2 billion in deferrals will be paid off next year.

After next year, Brown wants to treat school transportation like any other categorical program; under the governor’s new move to flexibility, all of the categoricals will be lumped together, giving districts the option to spend the money as they choose.

Over the next six years, however, Brown is proposing to convert to a weighted student funding system; categorical money will be thrown in one big pot and redistributed to districts based on the number of low-income students and English learners they enroll. Districts with big bus and other categorical funds but few disadvantaged students will find that they will lose some money they’ve been getting.

In restoring bus money, Brown recognized the liability of asking voters to raise taxes for education while at the same time eliminating money for a vital service for many rural and some urban districts, like Los Angeles Unified. Now, Brown can say that at least districts won’t be losing funding next year.

The half-year, $248 million for transportation that SB 81 restores is a different story. As part of the current state budget they passed last year, Brown and legislators said they’d cut bus money if state revenue came up short by December. It did, so the half-year bus transportation cut was to be automatic. After strongly affected districts protested, the Legislature decided to make up for $248 million by deducting $42 per student from every district’s base funding instead. That cut equals 0.65 percent of districts’ revenue limit.

LAO praises Brown budget …

With some differences over details, the Legislative Analyst’s Office has commended Gov. Jerry Brown’s overall approach to school spending and what he’d do with the higher taxes he’s asking voters to approve. Where they disagree is over what should happen if the extra money doesn’t come and the state  budget has to be cut.

In an analysis of Proposition 98 spending released Monday, Legislative Analyst Mac Taylor agreed with the major elements that Brown is proposing, including those likely to become sources of contention:

  • Deciding to pay off billions of dollars of deferrals owed to schools instead of creating new spending;
  • Creating a new formula for funding schools;
  • Eliminating most state education mandates and adopting a flexible approach to others;
  • Canceling transitional kindergarten, a program for some four-year-olds that was to begin this fall (see accompanying story by Kathy Baron).

Here’s a summary of the issues that the Legislative Analyst examined and his recommendations:

2012-13 budget

Brown is expecting to raise $6.9 billion for the General Fund by raising the sales tax a half cent and the income tax on the wealthy for five years. The LAO is predicting that the tax will generate $2.1 billion less than that, but, assuming that Brown is right, Prop 98  spending would rise $4.9 billion next year to $52.5 billion.

With a tax increase, Proposition 98 spending would rise 10 percent next year. Click to enlarge. Source: LAO
With a tax increase, Proposition 98 spending would rise 10 percent next year. Click to enlarge. Source: LAO

Brown is proposing to use all of the new money to backfill money owed to schools and to pay off $2.4 billion in deferrals, money that the state owes school districts and community colleges in one year but delays paying until the next, a gimmick that forces schools to borrow in the interim.

Even though per-pupil spending would be down 9 percent next year compared with five years ago, with 10 percent fewer teachers in schools, the LAO approves of this approach ­ – and not increasing spending on programs or including a 3.1 percent cost of living adjustment to which schools are statutorily entitled. Since districts need to build budgets now, not knowing whether taxpayers will approve higher taxes in November, it’s wiser to plan on paying down deferrals instead of budgeting spending increases, only to face midyear cuts if the initiative fails, the LAO report said.

Drastic midyear cuts

If the tax initiative fails, Brown is proposing $5.4 billion in midyear cuts, with 90 percent, or $4.8 billion, coming out of Prop 98 spending – $2.4 billion more than needed. Brown would achieve this by shifting the responsibility for repaying school construction bonds, which had been a General Fund expense, to Prop 98.

The LAO questions the wisdom of doing this. (The Education Coalition is prepared to sue over the issue.) School debt obligations, it turns out, vary sharply from year to year, so Prop 98 would be subject to big fluctuations. “Absent a clear, compelling policy rationale, we question why the state would want to change its longstanding education facility funding practices, particularly when the change results in a significant reduction in funding for school and community college operations.”

Brown is also proposing to renege on including building back in $1.7 billion in sales tax revenues that he removed from Prop 98 last year. The LAO calls this tactic “risky.”

Budgeting for the coming year will be tricky for school districts and community colleges, because midyear cuts, if the tax initiative failed, would be problematic. The LAO recommends that lawmakers be specific as early as they can on how much schools can expect to be cut, and then give school districts a range of options. These would include removing additional categorical and mandate requirements, permitting a shorter school year (already down to 175 days), allowing larger class sizes, and potentially allowing for districts to lay off personnel after November, which is not currently allowed.

Wall of debt

Brown wants to use a temporary tax increase and the economic recovery to pay off $18 billion in deferrals and other debts owed to K-12 schools and community colleges. Source: LAO. (Click to enlarge.)
Brown wants to use a temporary tax increase and the economic recovery to pay off $18 billion in deferrals and other debts owed to K-12 schools and community colleges. Source: LAO. (Click to enlarge.)

After next year, Brown wants to keep rapidly paying off deferrals and other past obligations owed to schools while the temporary tax is still in effect. He would use all of the extra Prop 98 money over the next four years – and then some – to do this, instead of restoring past cuts in spending. By 2015-16, Brown would have paid off all $10 billion in deferrals owed to schools, $3.5 billion in reimbursements for state-mandated programs and $2.6 billion in past Prop 98 debts to schools and community colleges.

“We commend the Governor for developing a plan to retire several of the state’s existing school and community college funding obligations,” the LAO said, although it would slightly extend the repayment schedule another year out. Districts and community colleges, hungry for more money after years of cuts, will no doubt argue that they deserve at least a piece of the new money.

Mandates

The LAO has been clamoring for mandate reform for years. It has argued that some mandates are unnecessary; districts would adopt some other anyway; reimbursements that districts seek vary wildly; and there’s no incentive for districts to be efficient with costs. The state owes districts $3.6 billion in unreimbursed mandates.

Brown proposes to eliminate more than two dozen  mandates, including some related to truancy reporting, scoliosis screening, and pupil residency verification. He is proposing  a block grant of $200 million, including $22 million for community colleges, for two dozen remaining mandates. Districts would have to enforce all of them to get any of the money, including keeping immunization records, following the Brown Act, and doing criminal record checks of staff and volunteers. The LAO said that amount seemed right. “Overall, we find that the Governor’s proposal offers an attractive alternative to the current inefficient and burdensome mandate process,” the LAO wrote.

Weighted Student Funding

Brown wants to give districts more control over spending, and he’d create a simpler, clearer funding system that directs more money to districts with sizable numbers of low-income students and English learners. The LAO likes the concept: “Because the state’s current K–12 funding system is complex, inequitable, and inefficient, we recommend the Legislature adopt some version of the Governor’s proposal.”

It also expresses concerns. Brown would eliminate most categorical programs – separate funds for specified purposes – and use the money to fund weighted student formulas for disadvantaged students. The LAO estimates that about 60 percent of the state’s school districts have large concentrations of them.

Under Brown’s plan, districts could spend the money however they want, but they’d be held accountable for the results – however they’re measured. LAO is skeptical: “We are particularly concerned that districts would not be required to spend the additional funding generated by their disadvantaged student populations on services that benefit those students. A district could, for example, choose to spend that additional funding on providing an across–the–board increase to teacher salaries rather than on supplemental services for English learners and low–income students.”

Because the state accountability system lacks sufficient nuance or sanctions to keep on top of districts or help them improve, the LAO recommends that the Legislature impose requirements that extra dollars be spent on disadvantaged students or that money for them be placed in a few broad categorical funds with specified purposes.

Big backing for Brown’s tax increase

The proportion of Californians who favor Gov. Jerry Brown’s proposed tax initiative has increased: 72 percent say they support it, compared with 65 percent when asked a month ago, according to the latest poll by the Public Policy Institute of California.

Among likely voters, the support is slightly less: 68 percent, up 8 percentage points from December. Those strong numbers could bolster the governor’s case in trying to persuade groups with competing initiatives to back down and withdraw their proposals.

Brown is drawing the most support from voters who favor first and foremost protecting K-12 education: 62 percent of likely voters said they’d pay higher taxes for that purpose; less than half  said they’d support higher taxes for health and human services (49 percent), higher education (46 percent), or prison and corrections (only 12 percent).

Brown is proposing to temporarily increase the sales tax by a half percentage point and to raise the income tax rate on the wealthy, starting in January 2013. The Department of Finance estimates it would raise $6.9 billion the first year (the Legislative Analyst is projecting only $4.8 billion) for the General Fund, with a portion of it boosting Proposition 98 spending. But Brown has been calling it a tax for education funding, and a friendly reading from the Attorney General’s office, in the title and summary for the ballot, confirmed that notion: TEMPORARY TAXES TO FUND EDUCATION. GUARANTEED LOCAL PUBLIC SAFETY FUNDING. INITIATIVE CONSTITUTIONAL AMENDMENT. Increases personal income tax on annual earnings over $250,000 for five years. Increases sales and use tax by 1/2 cent for four years. Allocates temporary tax revenues 89 percent to K-12 schools and 11 percent to community colleges. …”

Brown's tax initiative would have widespred support if the election were tomorrow. Click to enlarge.
Brown's tax initiative would have widespred support if the election were tomorrow. Click to enlarge.

PPIC’s question about the initiative also cast it as an education tax. Poll respondents were asked: “The initiative would raise about $5 to $7 billion annually with the new revenues going to K–12 public schools. Do you favor or oppose the proposed tax initiative?”

The question drew two-thirds majority support across regions and demographic groups. Democrats (85 percent) and Independents (65 percent) backed it overwhelmingly, but even 53 percent of Republicans favored it.

And respondents favored it, even though, questioned separately, over two-thirds (69 percent) of respondents said they would oppose raising the state sales tax to 7.75 percent. On the other hand, 74 percent favored raising taxes on the wealthy.

The one group that’s not broken out, however – luckily for Brown – is school officials and education advocates, those most knowledgeable about his proposed budget. As I wrote earlier this week, Brown is not proposing to use the new tax revenues to increase spending for schools; instead, he wants to use nearly $5 billion to pay down deferrals – short-term debt the state owes schools. He proposes not to pay the 3 percent cost-of-living increase that schools would be owed next year. (In a caution to Brown, 75 percent of those polled also said they’d oppose the nearly $5 billion in automatic cuts to K-12 and community colleges if his initiative fails.)

Selling the initiative as an education tax will remain Brown’s strongest suit – but also could become a challenge as voters, too, learn that their schools won’t be getting more money. That’s why Ted Lempert, president of Children Now, is leading an effort to pressure Brown to amend his initiative both to include policy reforms and to increase the money specifically going to K-12 schools and early childhood education.

Will Brown do a rewrite?

“The poll makes me optimistic; it shows the public supports more  money for schools,” Lempert said  Tuesday. “But you cannot go by a poll January. The governor will need broadly defined education groups, including parents and districts, on his side.”

Lempert supports a key reform that Brown is proposing this year: the adoption of a weighted student formula that will provide extra dollars to districts with concentrations of English learners and low-income students. But there must be new money  to do the system right and avoid winners and losers, Lempert said.

Lempert said that ideally, Brown would agree within the next week or so to rewrite his initiative to guarantee more money for education. Alternatively, the Legislature could make adjustments in the budget process, to prevent Brown from manipulating Proposition 98 spending levels, or legislators could pass clarifying statutes spelling out the intent of the initiative.

Two competing initiatives would provide more money for schools through taxes that the PPIC poll indicates that voters would favor. The California Federation of Teachers would raise about $6 billion by increasing the income tax on those earning more than $1 million annually. Civil rights attorney Molly Munger would raise up to $10 billion by increasing income taxes of all but the poor, with the richest Californians paying the steepest increases. Neither Munger nor the CFT has given any sign of backing down at this point.