The incoming president of the California Teachers Association said Tuesday that he likes Gov. Jerry Brown’s revised state budget and expressed confidence that the four Republican legislators needed to pass $9 billion in tax extensions would vote for them.
“We believe that this is the best possible budget for us right now,” CTA Vice President Dean Vogel said at a forum on the budget sponsored by the Silicon Valley Education Foundation in San Jose. “We believe the potential for four votes is better today than a few weeks ago.”
But Vogel, who assumes the presidency next month, also warned against placing the tax extensions on the ballot in November or earlier, as Brown has implied that he favors. Under that scenario, the Legislature would vote to extend the temporary tax increases – the sales tax, the vehicle license fee, and the personal income tax (which would be suspended next year, then resumed) – for four months, until voters could decide whether to continue them further. But districts building their budgets this year would be left holding the bag if the taxes were then defeated.
“To start the year with one expectation and then change it, you disrupt everything,” Vogel said. “That’s why we’re concerned about a November election.” Brown wants to keep his pledge to voters that as governor he would not do a tax extension without their consent, “but at the same time we have a responsibility to these kids.”
County superintendents must sign off on districts’ budgets, and Santa Clara County Superintendent Chuck Weis said the prudent approach at this point would be not to build in the tax increase. That would mean assuming a cut of $2.1 billion in Proposition 98 funding – about $350 per student, or about 5 percent. (Update: Weis’ opening remarks can be viewed here.)
The CTA wants the Legislature to approve the tax extensions on their own, without turning to voters, but that’s unlikely to happen, so the union’s fallback is to put it on the November 2012 ballot. That would require Republicans to approve extending taxes 18 months before a vote. A compromise might be a June 2012 ballot, which would at least allow schools to build a full year’s budget with revenues intact.
Challenge of explaining deferrals
Brown’s budget raises Proposition 98 funding by $3 billion, to $52.4 billion. That is both a blessing and a dilemma, because the governor wants to apply the extra money to eliminate $2.5 billion of approximately $10 billion in deferrals – late payments owed to districts one year but paid the following fiscal year. Brown is proposing essentially to wipe a portion of the debt off the books, forcing districts to borrow less money while improving their financial stability and credit ratings.
Tony Garcia, superintendent of the Oak Grove School District in San Jose, explained the challenge. Hours after Brown’s budget was released, at a regular monthly meeting, three union presidents asked about getting more money for health benefits. “As superintendents, we need to communicate that (eliminating) a deferral is not new money. We’re getting what’s owed to us, not new money.”
Weis said that this budget would just begin the task of digging districts out of the hole that the recession put them in. The state owes schools about $13 billion: $10 billion from underfunding Proposition 98 during the past several years (an obligation known as the Prop 98 maintenance factor), and $3 billion from underestimating revenues owed to schools when building budgets at the start of the fiscal year, known as “settle-up costs.” The combination equals a 20 percent deficit in funding that must be repaid over time. “Don’t be fooled by the May revision,” Weis said. “We are not fully whole, and our funding system hasn’t been changed to make it work.”
Marshall “Mike” Smith, former education program director for the Hewlett Foundation and until recently a senior adviser to U.S. Secretary of Education Arne Duncan, cited the impact of unstable funding in Los Angeles Unified. “Class sizes are bumping up against fire laws; they’ve cut back 75 percent of their administration; there’s been an erosion and a loss of the intellectual infrastructure,” he said. “I believe a lot in stability. You can do a lot even if you’re not well resourced if you know you have a stable funding base.”
Burton Goldfield, CEO of TriNet, a human resources outsourcing company with 20,000 employees in California, said that he supports the tax extension for schools, but it’s essential to begin a bigger discussion on education. TriNet is on a hiring tear but cannot fill the jobs in California. “We need to get the dialogue going past the budget issue to say what is the end goal. Is it trying to get high school graduates into jobs?
“We need metrics. If we can do that, you will get a lot of industry people to come to the table.”
Weis noted that 40 years ago, Californians spent 5.4 percent of their personal incomes on education; that has plunged to 3.6 percent. “So the question we need to ask ourselves is, “What level of education do we want and how do we go about funding that? We know what we expect of our kids, and yet we continue to cut our funding,” he said. “This is no way to run the most important business in California” – preparing the kids in California for the future.